Hydrodec Group Live Discussion

theprior 05 May 2018

Re: Q1 Good luck with your efforts FT. Did any of the banks you listed give a response to your enquiry?Whatever the loan terms the business is going nowhere unless it can sort out it’s feedstock problems. Whatever interest payments it has to make in t(e short term it needs more throughput to enhance earnings. That way it might be Ina position to repay the loans and start making money for the shareholders and not just Mr Black.TP

FunTech 04 May 2018

Re: Q1 TM, nice to see you get the point - I've suggested HYR look elsewhere for loans, rather than to Mr. Black. Don't get me wrong, its great to have such a shareholder to provide loans on a very short term/urgent basis, however I don't believe this is good for the other shareholders on a long term basis. Would you (or anyone else) like to give HSBC or NatWest or Barclays or some other bank a call and see if they would potentially give interest rates lower than 10% for a 10million loan? If they did, feel free to put the bank and HYR in touch. I've done some research and here is my bit.HSBC Large Corporate Lending0345 585 1004 (I just got voicemail - hope someone has better luck)(77, 10th Tower, Station Road, Reading, RG1 1LX - i.e. the relevant area)NatWestCorporate Team: 0345 308 8964 (most appropriate I believe)Busi Lending: 0345 711 4477Barclays Corporate Business Team0333 202 7441 (introducer team)0800 015 4242I guess if neither of these 3 lenders can do less than 10%, then there isn't much point looking further. However, if any of them did less than 10%, then it may be worth checking further banks for the best rate. As Mortgage Rates are currently around 3.7%, I'm hoping that Business Loans would be somewhere between 4% and 10%. Does that seem reasonable? Of course I may be totally wrong - Ideally this is the job of a CFO, however after many years of Mr. Black loans, it doesn't appear our CFO's are looking for the best/cheapest capital (I'm very concerned about conflict of interest). the way "Hydrodec Group Plc" company registration number from Companies House is 05188355 (Banks will surely ask for that to make sure there is no mix-up with Hydrodec UK which Mr. Black bought from us for £1). the way, may I be so bold as to suggest anyone calling a bank should make their intentions clear eg. that you are/not working for the company and just looking to introduce the Bank to HYR and give the bank new business - they always like to think you're giving them new business, especially if its big numbers like 10mil . Of course if anyone has the direct number for Moynihan, I believe providing that may be very useful. I for one don't like people who just complain and knock people down all the time - would be great if someone else now picked up the baton and became an active shareholder.FT

The Millipede 03 May 2018

Re: Q1 “Even on low volumes, they have a positive EBITDA (thats Earnings Before Interest, Tax, Dividends and Amortisation). From a cash flow perspective the only one of those four that is important is Interest ... the interest due to Black.”Pfff. At the end of the day, a company with debt has to be able to service the debt. Otherwise it is not really profitable. Not sure why Andrew Black should be accepting lower interest for our benefit.Although I agree it would be nice.

FunTech 03 May 2018

Re: Q1 Better still - I'm trying to get Investment Banks "Debt Capital Markets" Initiation teams or Commercial Lending teams to get in touch with them - remember, banks like business too.Black even charges a management fee for giving the loans, when its largely a copy paste exercise!As ever dyor,FT

FunTech 03 May 2018

Re: Q1 TP,you are wrong there. Even on low volumes, they have a positive EBITDA (thats Earnings Before Interest, Tax, Dividends and Amortisation). From a cash flow perspective the only one of those four that is important is Interest ... the interest due to Black. Maybe you're clever and already read in the report and are just having a laugh.FT

theprior 03 May 2018

Re: Q1 Can’t see any bank lending HYR money on this latest set of figures which give the impression of terminal decline. Let’s face it, if they can’t sort the supply problems the company is finished despite its superior IP!!TP

The Millipede 03 May 2018

Re: Q1 Funtech,If you are so sure the company could source cheaper credit elsewhere it is probably worth dropping them a line. I am sure they will be grateful to hear from you. Cheers,

FunTech 02 May 2018

Re: Q1 Do I understand this right? We've just had a bigger positive Earnings (EBITDA) this year Q1, than last year Q1, but we still need an additional loan of 500k form Mr. Black, in order to pay back Mr. Black for the interest that HYR owes him?Why are HYR not reducing the interest rate payments due, by going to a bank or anywhere, where its cheaper than 10% from Mr. Black? 10% of 10m loans is about USD 1m per year in interest 250k per Q. Thats huge. Clearly the business is profitable even at very low production volumes and the issue is mainly due to Mr. Blacks debt.Loans and interest rates are a CFO matter. CFO, please sort this out immediately and please don't let your conflict of interest with Mr. Black get in the way.FunTech.

The Millipede 02 May 2018

Re: Q1 Yes, but..... the weather disruption in the US was always likely to cause problems while at the Australian end, there has been a delay to a decommissioning contract till the next quarter.I do agree the question that needs answering is, is there a viable business model here, but I do not think predicted weather disruption during a quarter that is always challenging really helps us with an answer.

theprior 02 May 2018

Re: Q1 Agreed Callun. It is a matter of great concern that the supply problem is not improving, in fact it’s much worse and there are no signs of any turn around. Some hopeful buyers have raised the sp from its early 30%+ drop but they are brave souls indeed to put more investment in at this stage of the game. I’m looking for some workable forward planning before I put any more in.

Callun 02 May 2018

Re: Q1 Well. if HYR had been making a profit, these results would have amounted to a profit warning, and as these tend to come in threes, the future does not look bright.This business model is not working. Here we have a product supposedly in high demand, but HYR can't produce it because it can't source the raw materials needed to make it. This has been a known problem for some time, and the company has failed to rectify it. If it can be fixed, then why have they not fixed it? If it cannot be fixed, then they should declare that and run the business accordingly, or just shut up shop.With the SP heading down once again I suspect that it will gently slide into Mr Black's ownership, where it will miraculously be discovered that there is a stockpile of raw material just waiting to be processed and turned into a large profit. Meanwhile, the management will be handsomely rewarded for their sterling services and we PIs will be left with nothing.Can anyone offer a more upbeat interpretation of the Q1 statement just to cheer me up?Callun

FunTech 26 Apr 2018

Re: Q1 I'm sure we all send our best wishes to Chris Ellis and his family and that whoever in his family is ill, gets well soon.Now, lets see - we were told that we would get the Q1 "by the end of April" - so thats tomorrow/Monday, so expect the usual increase in share price before the news and a sell-off thereafter (old traders adage "buy on the rumour and sell on the news".So Mr. Black is a very large shareholder. He also owns the majority of the debt it seems. Recently his own personal CFO became CEO of HYR when Chris Ellis left. Its really great news that someone with such a good knowledge of HYR's business and finances could fill in at short notice for Chris. Lucky man might get two salaries now - hope he can manage the workload. While Mr. Black has provided a further GBP 500k recently at 0%, this dwarfs his large loans which pay a hefty interest rate - these high 10% interest rate loans have been squeezing the company for some time now (despite independent advisors saying they are "fair and reasonable" - I wonder how many independent advisors actually say something is not fair and reasonable. In my book, 5% would also have been "fair and reasonable" and the company would be hugely cash positive by now and would actually be in a position to start paying back its loans instead of needing further loans. ([link] I wonder if our new CEOs/CFO's can negotiate cheaper loans? I'm getting increasingly worried about the increasing need for more and more loans. This screams of cash flow problems ... only due to high interest loans.I'm just wondering what will happen if HYR, for whatever reason, is not able to meet its very large interest payments to Mr. Black? Does Mr. Black get the whole company all for himself at a nominal price and all the other shareholders get nothing? I've seen this happen more than once with companies. Then miraculously, once in the private hands of its new owner, those unprofitable companies manage to survive - does anyone remember Hydrodec UK? If that was such a bad business and had to be sold for £1 to Mr. Black with all its Mr. Black debt, how come its still in business today? I hope I'm overly sceptical. I'd be interested if our new CEO (CFO of Mr. Black) could explain how this business (old HYR UK) is surviving? [link] .Anyway, back to our own HYR (ours at least for the moment) - does anyone on this BB have any idea about the deal that was struck with G&S - isn't the whole reason they were brought in as "partners" and even shareholders, so that they would supply a lot of oil? Why are G&S not supplying a lot of oil to HYR? I would certainly not want to see G&S being able to increase their share capital of HYR NA further (they still have options I believe to increase their shareholding to 50% for a very small capital investment - I wonder if these options can be terminated based on G&S not supplying eneough oil?Generally, why is the supply of dirty oil such a constraint? Do HYR management know and are not telling us? Are G&S selling oil to Mexico for more than HYR are prepared to pay? If G&S don't have the oil, are other big companies like Safety Kleen increasing market share and deliberately "starving" HYR? Hmm. Something doesn't quiet sit right with me, considering the margins. How could the Mexicans pay more, including transport. I understand there are also other fundamental issues at play, like the demand for transformer oil generally is dropping due to newer/efficient/"dry" transformers. Is this the main issue? If so, then we should also be told about that. I wonder if Mr. Black and our new CEO know the answer to the feedstock constraint? Maybe they already know the answer. Well, at least issuance of debt is not insider trading and I believe converting debt to equity also isn't insider trading and a buyout in insolvency also isn't insider trading. I rea

stratty 26 Apr 2018

Re: Q1 It always seems to tick up this time of year, then fall back into its winter slumbers.

Callun 26 Apr 2018

Q1 The SP has been ticking up for a few days.We must be due a Q1 statement soon. Either some good news has leaked out, or there is speculation that there will be some.Previous statements have tended to be positive and produced a short term lift to the SP. Hoping for a repeat I have made a modest top up today with a view to taking a short term gain. I still don't trust this lot; too much promise, too little progress.Callun

Callun 04 Apr 2018

Re: Board changes I was sorry to hear that Chris Ellis had to leave for reasons of close family ill health, and wish him and his family well.Yet more disappointment for Hydrodec. It is probably a sensible decision to bring Moynihan into the role of interim CEO to provide a breathing space while a new board can be assembled.However, in the short term at least, this will create uncertainty, and I do not expect any positive price movement to arise from this.Despite the crowing about its first positive annual EBITDA, the company still finds itself short of cash and has had to run to Andrew Black for more funds.I am still concerned that this is leading up to a backdoor takeover. Mr Black is the largest share holder, largest creditor, a non executive director and now has his buddy, David Alan Dunwoodie also on the board. It's getting a little incestuous.I don't expect much positive news in the Q1 udate at the end of April.Definitely NOT a buy for me.Callun