I am trying to unravel who owns who, and who are still partners, regarding Hydrodec’s proposed refinery at Eastham and it is rather confusing.
Below is some of the details so far :-
- Dunedin backed OSS Group makes aquisition
- KPMG sells OSS Group Ltd to Hydrodec Group plc
- Essar Oil teams up with Hydrodec for UK oil re-refining centre
- Hydrodec signs deal with CEP for lubricant oil re-refinery in UK
for full articles
Essar Oil teams up with Hydrodec for UK oil re-refining centre
Submitted by Sharon Alle on 12th November 2013
Essar Oil UK has teamed up with industrial oil refining company Hydrodec to initiate re-refining operations at the Stanlow refinery complex in Cheshire, UK.
According to the agreement, both companies will focus on developing two oil re-refining plants with a combined production capacity of 130m litres per year. The re-refining project is expected to generate an annual revenue of approximately USD 150m.
Volker Schultz, CEO of Essar Oil UK, said: “We look forward to jointly developing this innovative project, which will combine Hydrodec’s proprietary technology with Stanlow’s considerable operational and project execution expertise.”
Ian Smale, CEO of Hydrodec, said: “This agreement will transform our ability to deliver our UK strategy. In Essar and its Stanlow refinery we are partnering with a leading international oil refiner with all the existing facilities and capability required for the successful delivery of the Hydrodec re-refining process. We believe a combination of our oil collection, feedstock delivery and technology with Essar’s refinery operations and process management expertise will prove extremely powerful for the longer term expansion of our business into new markets. It has the potential to make the UK the oil re-refining hub of Europe.”
Dunedin backed OSS Group makes acquisition
21st October 2011
OSS Group, one of the largest waste management companies in the UK specialising in hazardous garage and workshop waste, backed by Dunedin, the mid-market private equity house, has acquired the Nottingham based Hall and Campey for an undisclosed sum. This represents the fourth buy & build transaction undertaken by a Dunedin backed business in the current quarter, as Dunedin continues to drive value across its portfolio.
OSS is particularly known in the waste industry for its collection of waste mineral oils, which it recycles into a Processed Fuel Oil product called Gen3™. Hall and Campey is a well-established waste oil collection business primarily operating in the Midlands and East Anglia; also specialising in garage waste, secure destruction of redundant materials and plastic recycling. It operates out of two depots in Nottingham, employing 31 people.
Dougal Bennett, a Director of Dunedin who sits on the board of OSS, said: “There were a number of compelling reasons to complete this transaction. It not only strengthens the OSS footprint across the UK, it also broadens its service offering, helping to diversify the business and build on its successes achieved to date.
“The sector offers opportunities for consolidation and we will be looking carefully at how we can continue to help OSS grow in this way.”
According to OSS’s Group Managing Director Iain Lees, “Adding the regional strength of Hall and Campey to our existing national service creates a much stronger organisation in terms of total UK coverage. It operates similar services to OSS and will continue very much as now but with the benefit of the OSS infrastructure and market leading Gen3™ technology.”
The plastics recycling and secure materials destruction operated by Hall and Campey will be developed by OSS, with the intention of extending these services nationally.
“Key to this acquisition” says Iain Lees “is that the waste oil collected from Hall and Campey’s customer base can now be used by OSS to produce our Gen3™ processed fuel oil. We are experiencing a high demand for this high quality recovered fuel so additional feedstock is a considerable benefit. We will continue to invest in securing further waste oil streams and further innovative technological solutions to provide market leading products.”
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KPMG sells OSS Group Ltd to Hydrodec Group plc
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.”
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HydroDec Group plc
6 September 2013
Hydrodec Group plc
(“Hydrodec”, the “Company” or the “Group”)
Acquisition of the business and assets of OSS Group Limited
Hydrodec Group plc (AIM: HYR), the cleantech industrial oil re-refining group, is pleased to announce the acquisition of the principal business and assets of OSS from the administrators of OSS Group Limited (and certain of its affiliates) for a purchase price of £4.65 million in cash.
The OSS business is the UK’s largest collector, consolidator and processor of used lubricant oil and seller of processed fuel oil, processing approximately 60 million litres of used oil in 2012.
It has a national network of oil storage and transfer stations, currently serviced by a fleet of more than 90 trucks which collect used oil and other garage workshop waste from over 30,000 customers.
Used oil is converted into processed fuel oil at OSS’s plant at Stourport and principally sold on to the UK quarry and power industry. OSS’s existing senior management team led by Iain Lees will be joining Hydrodec together with approximately 200 existing employees.
The current OSS business generated revenues of £28.5 million in 2012 and a normalised EBITDA1. of approximately £1 million; the net asset value of the acquired assets is assessed at approximately £4.5 million.
The purchase price is being financed by way of a short term revolving credit facility. Management expect the transaction to be EBITDA accretive to the Hydrodec Group within two months of the acquisition (after transaction costs have been incurred) and accretive to earnings overall in 2014.
Rationale for the Transaction
The combination of OSS’s access to used oil together with its operating capability makes it an ideal partner for Hydrodec to utilise Hydrodec’s existing transformer oil technology and to develop and deploy its new lubricants re-refining technology in the UK:
- It provides a platform to import Hydrodec’s SUPERFINETM for sale in the UK together with a capability to collect used transformer oil from the UK power companies and overseas;
- It will underpin the development of Hydrodec’s new lubricants technology in the UK;
- Once Hydrodec’s new technology has been deployed in the UK, it offers the potential to provide over 60 million litres per annum of feedstock which the Group intends to re-refine into a high grade lubricant base oil; and
- It provides a platform to develop other opportunities to consolidate the oil collection and re-refining market in the UK and Europe.
Financing of the Acquisition
Following consideration of possible funding options, and in light of the timing and completion logistics involved in the structure of this particular transaction, the Board has approved financing of the acquisition through the drawdown of funds made available under a short term revolving credit facility (the “Facility”) provided by Andrew Black, a non-executive director of the Company. The Facility is for up to £7.5 million and the balance (not required for the acquisition and related costs) will be available to provide additional working capital to the OSS business. Interest is payable at 7 per cent per annum on drawn-down funds and there is a £10,000 arrangement fee. The Facility has a term of 6 months, repayable at any time by the Company. It is initially unsecured but if not repaid within 90 days from the initial drawdown security will be granted over the shares of Hydrodec (UK) Limited, a newly incorporated subsidiary of the Group which has acquired the OSS assets. The Board stated at the time of the interim results in July that active consideration is being given to the Company’s debt position with a number of options being explored for managing the balance sheet. This remains a priority for the Board in 2013.
As a director of the Company, Andrew Black’s provision of the Facility constitutes a related party transaction for the purposes of the AIM Rules. The directors, with the exception of Mr Black, consider, having consulted with the Company’s Nominated Adviser, Peel Hunt LLP, that the terms of the Facility are fair and reasonable insofar as Shareholders are concerned.
Commenting on the acquisition, Ian Smale, Chief Executive of Hydrodec, said: “OSS offers a very exciting new market entry that delivers the key elements of our business development strategy – a strong position in the used oil value chain, a profitable platform for growth with genuine business optionality, and the capability to accelerate deployment of our existing transformer oil technology as well as assist in our technology development.
The choice of the UK is deliberate, and we believe that Hydrodec’s technology together with the OSS operating platform can offer a transformational solution to a UK environmental problem and in due course offer the potential to extend into other attractive European markets.
We believe we can integrate OSS swiftly and in a way that makes the transaction accretive to EBITDA this year and accretive to earnings overall in 2014. A key component of this is the high quality management and staff that will join the Hydrodec team. I see this as the next step (after the US strategic partnership announced in April this year) of several we are seeking to take in order to transform Hydrodec’s scale and profitability, and to normalise our balance sheet.”
- Normalised EBITDA: earnings before interest, tax, depreciation and amortisation adjusted to exclude exceptional and one-off items.
For further information please contact:
|Hydrodec Group plc||020 7907 9220|
|Ian Smale, Chief ExecutiveChris Ellis, Chief Financial Officer|
|Peel Hunt LLP(Nominated adviser and broker)||020 7418 8900|
|Vigo Communications (PR adviser to Hydrodec)||020 7016 9570|
|Patrick d’AnconaChris McMahon|
This announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of Hydrodec. By their nature, future events and circumstances can cause results and developments to differ from those anticipated. Nothing in this announcement should be construed as a profit forecast. No undertaking is given to update the forward-looking statements whether as a result of new information, future events or otherwise.
Notes to Editors:
Hydrodec’s technology is a proven, highly efficient, oil re-refining and chemical process initially targeted at the multi-billion US$ market for transformer oil used by the world’s electricity industry. Spent oil is currently processed at two commercial plants with distinct competitive advantage delivered through very high recoveries (near 100%), producing ‘as new’ high quality oils at competitive cost and without environmentally harmful emissions. The process also completely eliminates PCBs, a toxic additive banned under international regulations.
Hydrodec’s plants are located at Canton, Ohio, US and Young, New South Wales, Australia and its shares are listed on the AIM Market of the London Stock Exchange. For further information, please visit www.hydrodec.com
This information is provided by RNS
The company news service from the London Stock Exchange
Hydrodec signs deals with CEP for lubricant oil re-refinery in UK
4 August 2014
Hydrodec has signed an engineering and licence agreement and a technical collaboration agreement with Chemical Engineering Partners (CEP) to open a lubricant oil re-refinery in the UK.
The agreements cover the engineering, planning and development of the lubricant oil re-refinery, which is expected to start operations in 2016.
The oil re-refinery will create a material source of sustainable base oil for the UK lubricant market and a platform for further improvement.
The agreements give Hydrodec an exclusive UK licence to develop CEP’s wiped-film evaporation and hydrogenation technology, as well as the basic engineering for a lubricant re-refinery, with a 75 million litre per year capacity.
Both the companies intend to take advantage of future opportunities in the UK and potential international markets using the technology collaboration agreement.
The partnership will allow Hydrodec to expedite its plans to enter into the UK’s lubricant oil re-refining market.
Hydrodec said the deals are outside of its previous arrangements with Essar Oil UK and it will undertake the CEP enabled project independently at a separate advantaged location, currently in lease and development planning stages.
The company will start a basic engineering design and consultation process for planning permission by the fourth quarter of 2014.
Hydrodec chief executive officer Ian Smale said: “The collaboration with CEP will enable us to pursue an accelerated development of lubricant re-refining at significantly lower technology and commercial risk in the UK, thereby allowing Hydrodec to focus its own technology development on upgrading rather than re-inventing the re-refining process.
“We would hope that any technology improvement will be rapidly incorporated into all existing and future plants, so positioning us to offer upgrades or retrofit technology on existing re-refineries anywhere in the world.”
Image: Hydrodec chief executive officer Ian Smale and CEP president Joshua Park sign the agreements. Photo: courtesy of Hydrodec Group plc.