HYR.L Regulatory News (HYR)

13 Oct 2006 15:32

HydroDec Group plc13 October 2006 13th October 2006 THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR SOUTH AFRICA. HYDRODEC GROUP PLC ISSUE OF NEW EQUITY TO FUND AUSTRALIAN INFRASTRUCTURE AND USA EXPANSION PLANS Hydrodec Group plc ("Hydrodec" or "the Company") today announces the conditionalplacing of 6,000,000 new ordinary shares of 0.5p each at a price of 28p pershare ("New Ordinary Shares"), to raise £1,680,000 gross (the "Placing").Application has today been made to the London Stock Exchange plc for theadmission of the New Ordinary Shares to trading on AIM. Immediately followingthe Placing, the total number of shares in issue will be 184,645,402. The NewOrdinary Shares will rank pari passu in all respects with the existing Hydrodecshares in issue. It is expected that admission will become effective anddealings in the New Ordinary Shares will commence on 19th October 2006. The funds raised will be used for infrastructure development at Hydrodec's20,000 litre a day transformer oil production facility at Young, New SouthWales. Demand from Australian customers has created a requirement for expansionof the Superfine product line to include passivated as well as inhibited oilproducts (see Glossary below) together with expansion of used oil feedstockcapacity in order to store the oil that is the basis of Superfine production.This will allow Hydrodec to plan production schedules and to meet customerdemands in the future, completing Hydrodec's stated mission of creating aworld-class centre of excellence for transformer oil at Young. Ongoing development of Superfine production systems has also identified a highrate product finishing process that provides a more efficient way of meetingcustomer quality and delivery needs, a process which further underpinsHydrodec's production technology advantage in the transformer oil market. The funds will also be used to further the development of Superfine productionin America. Significant progress has been made in this area that has seenconsiderable management and financial resource dedicated to legal, logisticaland development work to analyse the US transformer oil industry and to identifythe ideal location, structure and partners for the plant. Hydrodec hasidentified a number of possible production sites and a final decision will bebased upon the outcome of ongoing negotiations with local and state governmentbodies. Hydrodec is also working to finalise marketing partnerships that willsupport rapid commencement of sales upon the commissioning of the USA plant. John Gunn, Chairman, commented "I am delighted that take up of Superfine oil inAustralia has led to the requirement for expansion of the Superfine product lineand additional product storage and delivery capacity. As well as developments atYoung, significant progress has been made towards the establishment of Hydrodecin the USA, and I hope to shortly announce detailed plans for the first Hydrodectransformer oil plant there". For further information please contact: John Gunn, Chairman Hydrodec Group plc Tel: 020 7236 6236 Glossary Inhibited oil has had an anti-oxidant added. Superfine has only been sold todate with inhibitor added. The power industry is generally moving to inhibitedoil in transformers. Passivated oil has a corrosion passivator added. The passivator is used toprotect the internal components in a transformer. Passivated oil is specified bysome utilities for use in transformers. Hydrodec now produces both inhibited andpassivated transformer oil. This information is provided by RNS The company news service from the London Stock Exchange