10th Feb 2025 13:22
(Alliance News) - Haydale Graphene Industries PLC on Monday said it has now lodged filings to place its wholly-owned subsidiary Haydale Ceramic Technologies LLC into a corporate insolvency process, as part of its ongoing cost saving efforts.
The Carmarthenshire, Wales-based developer of materials using graphene and other nanomaterials said dissolving the subsidiary "is seen by management as the best means of realising maximum value for those assets and giving the greatest potential for cash to be returned to Haydale".
A court hearing in the US state of Georgia is expected to commence within the next few days, with HCT due to be sold via court-supervised public auction. The process will take place under the terms of Chapter 11, subchapter V of the US Bankruptcy Code.
The move is expected to "significantly reduce" the group's overhead costs and operational complexity, as well as contribute towards its goal of delivering improved profitability and cash flow during financial 2025.
"Over the last few years, the group has strategically repositioned its US operations by expanding focus from silicon carbide powder sales to the manufacture and distribution of advanced cutting tools. This transition aimed to enhance value by moving up the supply chain and capitalising on the growing demand in sectors such as aerospace and automotive," said Haydale.
"Despite these strategic initiatives, the expected growth in the group's US operations has not materialised. It has become clear to the reconstituted board that the previous management team's confidence in the US business' ability to convert the pipeline on a timely basis was overly optimistic and not reflective of the group's operational preparedness or knowledge of market conditions.
"Despite efforts to improve the performance of the US business, the board expects HCT to remain loss-making beyond financial 2025 and has concluded that divestment of the US operations is in the best interests of the company and its shareholders".
The insolvency decision follows Haydale's closure of its subsidiary office in Thailand, and the consolidation of its UK offices to a single site at the group's South Wales headquarters in December.
Haydale also in December sold its South Korean-based subsidiary, Haydale Technologies (Korea) Co Ltd, to its local director, Minon Kim. The sale was agreed at the nominal sum of GBP1, plus the write-off of remaining inter-company debt owed to Haydale of around GBP300,000.
The UK business has now been reorganised to focus primarily on two key business lines: heating ink-based energy efficiency products and carbon capture.
Haydale shares were up 4.4% at 0.12 pence each in London on Monday afternoon.
By Emily Parsons, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.