Hydrodec Share Discussion Threads

[capricious] 09/9/2013 11:37

Edison have released a note, we will have to wait for a fuller update as this is very brief - they expect EBITDA to reach $3.4 million by FY14, $4.4 million by FY15

With that kind of cash generation, they don't have to go for a big dilutive share offering to sort out the CULs issue, they could cover a chunk by a loan facility.

As mentioned before, the plan looks for them to eventually shift to using the feedstock for the higher value industrial oil products.

OSS already have permits for import...

The more I read about the deal, the more I think the board have pulled the proverbial rabbit out of the hat, and as Tommy Cooper would say, "Just like that"

Are we really still seeing under 10p

That short looks a bit shaky

[sammy_smith] 09/9/2013 10:03

Audio Webcast: Hydrodec Group HYR - Acquisition of the business and assets of OSS Group Limited

Click the link to listen

[mirabeau] 09/9/2013 07:41

Nice director buy

[bdroop] 08/9/2013 13:00

One of the reasons I bought into HYR was confidence in the approach of this management. Allied with a patient attitude that is.

[capricious] 08/9/2013 12:30

Broadcast on the 9th



As a side note: the ramp up in M&A activity for the company would be the result of the new blood on the board, their industry experience and specifically one or two with a strong background in M&A. I mention it because I've seen other sites where people have denigrated the decision to pay high salaries for new people.

[sueyou1] 08/9/2013 12:11

capricious, I concur!

[capricious] 08/9/2013 11:48

I think a big win and major draw for Hydrodec was their accredited laboratory and testing facilities, surely a jump start in applying the tech to other feedstock.

[sueyou1] 08/9/2013 11:18

bdroop, they would need to keep the business running as is for a while, as they need to get a pilot project setup for the Hydrodec motor oil process. Once they have proven the Hydrodec process, then they can start converting the systems at OSS. Look for a year long process before they start converting the current commercial systems to Hydrodec processes.

[bdroop] 08/9/2013 08:28

I wonder whether they might dispose of the non oil waste divisions quickly, or if they are cash generative will they need to keep them on or be able to keep them on in the short term? What will look better on the balance sheet? - if the balance sheet of HYR is its biggest "issue" going forward with the way this purchase is being financed?

[capricious] 07/9/2013 19:04

Just like the issues Hydrodec had with the EPA, OSS spent a lot of money and time gaining the stamp of approval for one of their products.

www.letsrecycle.com/news/latest-news/waste-management/oss-launches-gen3-recycled-fuel-oil
www.dunedin.com/news/2010/10/12/dunedin-backed-oss-wins-environmental-social-and-governance-award


Refinery (a little below the red marker)



Lastly their Gen3
www.ossgroupltd.com/uploads/files/leaflets/Gen3_Brochure.pdf

[capricious] 07/9/2013 18:53

Doing some further reading, the reason for the pre-pack is being kept private (for now), to me it seems good odds looking at their financials, that cash flow problems played a big part, if not the whole story, which brought down an otherwise good business.

I can't congratulate the company more, I wouldn't expect another opportunity like this to come along in a hurry. Once assimilated, they effectively have another Hydrodec, but at the size 'after' the expansion is complete from the G&S deal.

Although companies making buyout deals aren't an indicator of strength, but it's an amazing turn around to have Hydrodec on the hunt for other companies. Just great.

[capricious] 07/9/2013 12:27

Erkman, edale, good posts, agree


Looking at the cash position, they went from £2million in 31/12/2010, to under £2k a year later. Seems to coincide with a purchase arranged with Dunedin, buyout indigestion?


A neat deal, the purchase price covered the current liabilities, so creditors get their money, employees keep their jobs, and Hydrodec on first look, get a great platform for expansion without the large initial capital cost and long timescales when starting from scratch.

I guess without the OSS debt load, cash generation should be positive as the RNS mentions.

[edale] 07/9/2013 12:24

Before yesterday were they still wholly owned by Dunedin ? Looking back to 2010 Dunedin were reportedly trying to sell OSS for upto £50 million so clearly something has gone very wrong since then. On the Dunedin web site they currently have OSS on their books with a value of £15 Million. Historically there appear to have been a number of issues re where they could sell their refined fuel oil product with restrictions imposed by the EU. I guess this could have had a negative impact on its sale price (only conjecture). If Hydrodec can refine the raw material to a reuseable lubricant oil assuming the same limiting restrictions aren't applied by the EU it would presumably make a massive difference to the margin. Hydrodec must be very confident of their trials on refining lubricant oils to have taken this step. They had originally proposed a small pilot plant in Australia, presumably now this development will take place in the UK at one of the OSS sites.

[capricious] 07/9/2013 12:21

From this bullish statement to administration in two years...

hxxp://webcache.googleusercontent.com/search?q=cache:QXZzECY6W5EJ:www.liverpooldailypost.co.uk/liverpool-news/regional-news/2011/09/07/fuels-oils-firm-oss-group-back-in-black-92534-29374259/+&cd=23&hl=en&ct=clnk&gl=uk

[erkman] 07/9/2013 12:16

I would imagine they buy free of debt. The administrators will pay the chargees so much in the pound out of the proceeds.

[capricious] 07/9/2013 12:07

Checking companies house for OSS, they had nine outstanding charges to support loans, so I'm going with problems servicing the debt load, as a report from Dunedin mentions in their financial statement "Trading at OSS has continued to decline and a full provision has been made against the investment"


Status: Active
Date of Incorporation: 03/09/1999

Country of Origin: United Kingdom
Company Type: Private Limited Company
Nature of Business (SIC):
70100 - Activities of head offices
Accounting Reference Date: 31/12
Last Accounts Made Up To: 31/12/2011 (FULL)
Next Accounts Due: 30/09/2013
Last Return Made Up To: 03/09/2012
Next Return Due: 01/10/2013
Mortgage: Number of charges: 12 ( 9 outstanding / 3 satisfied / 0 part satisfied )
Last Members List: 03/09/2012
Previous Names:
Date of change Previous Name
26/01/2000 FOUNTAIN STREET FORMATIONS (59) LIMITED



Financials
hxxps://www.duedil.com/company/03835964/oss-group-limited

[capricious] 07/9/2013 11:29

I can't find a reason why OSS started to get into trouble, but until 2011 they were expanding, as seen in this link. Over leveraging... ??

www.dunedin.com/news/2011/10/21/dunedin-backed-oss-group-makes-acquisition

[capricious] 07/9/2013 10:47

We might get an update by Edison R

[capricious] 07/9/2013 10:46

Before seeing your post edale and after just seeing the RNS, my immediate thought was how would SVM play this, would they short the rise. I imagine they already knew something was on the cards, as those in the know started buying a few days ago. I suspect the rise would've been higher without the added pressure put on by the increasing short. If they have to cover, can't help but think there will be a good rise in the share price

What a coup by the board, took me completely by surprise and I think thanks and congratulations are in order for all those involved. I was hopeful of a UK entry, but some years hence, maybe now they can gain some government support and or funding.

We haven't got the specifics of the deal, I'm sure they have looked at the sums so that ongoing costs are covered, or at least until they put in place processing tech for their excellent product for UK and EU markets. It's an amazing platform for UK/EU, just as we enter a sustained growth phase.

And remember, any increase in EBITDA this year, equals a slightly better final earn out with G&S

[dirty75] 07/9/2013 10:00

You can only think the share price will kick on strongly on Monday. Directors of HYR will now be able to buy stock.

This really does seem, on face value, a stonking deal with plenty of ability to work together. HYR (UK) should be making a profit pretty swiftly.

Also you'd think this is the way to grow into Euro-mainland?

Back to the dizzy heights of 14-16p?

[edale] 07/9/2013 07:51

SVM increased their short to 0.97% on 5th Sept. Interesting to see how they play it from here. They could get their fingers burnt after yesterday's announcement.

[sueyou1] 06/9/2013 20:38

Well that IS good news :)

I did say that when QFI gets into the motor oil business thing could get very interesting, well now they are in it (even though some basher numpties claimed HYR would not be able to do motor oils LOL!) so lets see what the brokers say next!

[mortimer7] 06/9/2013 19:11

THIS ON KPMG WEBSITE TODAY

KPMG sells OSS Group Ltd to Hydrodec Group plc via 'pre pack administration'

The business and assets of OSS Group Limited, the Knowsley-based collector, consolidator and processor of used lubricant oil and seller of processed fuel oil, have been sold to Hydrodec Group plc in a deal which was undertaken by a team from KPMG's Restructuring and Corporate Finance practices in Manchester.

Brian Green and Paul Flint of KPMG's North West Restructuring team were today appointed Joint Administrators of OSS Group Limited, along with a number of its subsidiary companies. The company's head office is based in Knowsley, but it also trades from 11 other sites throughout the UK.
Following a period of marketing in the weeks prior to appointment, KPMG was able to secure an immediate sale of the business and its assets to Hydrodec Group, the cleantech industrial oil re-refining group.

The sale has successfully secured the ongoing employment of 185 employees, who have transferred across to Hydrodec.

Paul Flint, Restructuring Associate Partner at KPMG, said: "We have achieved an excellent outcome for creditors, employees and other stakeholders following an intense period of marketing the business which, together with our sector knowledge and experience, ensured a highly competitive process."

Jonathan Boyers, Corporate Finance Partner for KPMG, added: "During the marketing process, it soon became apparent that the combination of Hydrodec's technology and OSS's access to used oil made them an excellent strategic fit. We're particularly delighted that this deal will safeguard 185 jobs in the Knowsley area."

[edale] 06/9/2013 18:16

Worth a read of the OSS website, they have a wide range of services relating to general re cycling as well as oil.

[99matti99] 06/9/2013 17:55

Why was OSS in the hands of the administrators?