Transformer oil rerefiner Hydrodec said a proposed joint venture with a U.S. recycler of electrical transformers and other utility equipment remained in discussion, with possible changes after the potential JV partner instead expressed an interest in acquiring Hydrodec’s North American operations outright.
“The potential JV partner has since made an offer to acquire all of, or a controlling stake in, Hydrodec of North America itself,” London, United Kingdom-based Hydrodec said in a March 31 news release. “Whilst the offer did not meet the board’s expectations as to valuation, the parties remain in constructive discussions, including as to the possibility of the potential partner taking a minority stake in HoNA rather than the proposed JV structure.”
When the company announced the joint venture in October, it said the JV would add a transformer recycling facility at Hydrodec’s refinery in Ohio, enabling it to obtain more used transformer oil for use as feedstock. The name of the partner company, and the potential percentage of joint venture ownership for each company were not disclosed.
Hydrodec also confirmed it reached agreement on a $6.8 million refinancing package for its Canton, Ohio, transformer oil rerefinery and assets to replace an existing equipment lease, which is over-collateralized, and provide additional funds for feedstock, approved capital expenditures and growth opportunities.
The company also reached agreement with its existing U.S. lender on repayment arrangements for an outstanding $4.3 million loan.
An explosion and fire destroyed the processing unit at the Canton rerefinery in December 2013. The rebuilt plant resumed operations with two new production trains in mid-2015 and later brought four replacement trains online.
The original 22,000-square foot plant was completed in 2008 for around $17 million and had capacity to recycle around 8 million gallons of transformer oil per year. Described as hydrogenation-refined naphthenic mineral transformer oil, the company’s rerefined product, branded as Superfine, uses a proprietary catalyst to remove impurities from recycled transformer oil.
The company has shed most of its operations globally over the past several years
In March 2016, citing tough market conditions, the company sold its United Kingdom operations – including its waste oil collection business and a proposed rerefinery.
Hydrodec exited Australia following a 2018 business review. In January this year, an Australian court ruled in favor of Australian rerefiner Southern Oil Refining in litigation against Hydrodec and its now dormant Australian subsidiary. The case stemmed from a commercial dispute over a base oil rerefining joint venture that the companies entered in 2015. “The company continues to evaluate its position and has lodged a notice of intention to appeal,” Hydrodec said in the news release last week. “Should it not pursue the appeal, or if any appeal is ultimately unsuccessful, the company will seek an appropriate arrangement in respect of the settlement of the claim.”