Busy behind the scenes
Hydrodec (LONDON:HYR) has announced that it has arranged a $10m loan facility, which ensures the group has the cash required to expand operations beyond the six trains currently being prepared for installation. It is one of a sequence of actions taken during FY14, preparing the group to restart US transformer oil re-refining operations by end Q115 and to commence lubricant oil re-refining operations in the UK by end FY16. Our estimates and valuation remain under review until the new year.
Hydrodec is on track to recommence operations at the Ohio facility with six processing chains. This is 50% more capacity than December 2013 when a fire closed the facility, with minimal headcount increase. The new equipment incorporates a revised design, which gives improved process reliability, process flexibility, re-refining efficiency and output quality. The insurance claim, which paid out a total of $18.75m on final settlement, fully covers the cost of rebuilding the four original trains and the loss of business. In February the American Carbon Registry approved Hydrodec’s accounting methodology for generating carbon credits. In March Hydrodec applied for a patent regarding the modifications to the process, effectively extending the patent on the technology for another 20 years.
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