Additional Investment in Hydrodec of North America

17 October 2016

Hydrodec Group plc

("Hydrodec" or the "Company")

Additional G&S Investment in Hydrodec of North America

The Company is pleased to confirm that under the terms of its agreement of April 2013 with the G&S Technologies Group ("G&S") (the "2013 Agreement"), and pursuant to the commissioning of additional capacity at the Canton plant, G&S has acquired an additional 12.45% of Hydrodec's US operation, Hydrodec of North America ("HoNA"), for US$1.7 million as prescribed by the 2013 Agreement. The consideration has been satisfied by the provision of feedstock to the value of US$1.37 million and the payment, with immediate effect, of US$0.33 million in cash. Upon completion of this purchase Hydrodec retains 62.5% of the voting interests in HoNA.

The 2013 Agreement also provides that, upon establishing an additional two operating trains (being trains 7 and 8), representing an anticipated additional 15 million litres of capacity, financed equally between the owners, G&S will have the right to acquire a further and final interest of HoNA for US$1.7 million, to bring G&S' overall interest to 49.9%.

Commenting on this investment, Chris Ellis, Chief Executive Officer of Hydrodec said: "With G&S we continue to focus on creating the best quality transformer oil in the US market and positioning ourselves to take advantage of significant forecast growth in demand in the United States. We will now evaluate the most appropriate timing and location for the expansion programme."

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Notes to Editors:

Hydrodec's technology is a proven, highly efficient, oil re-refining and chemical process initially targeted at the multi-billion US$ market for transformer oil used by the world's electricity industry. MarketsandMarkets forecasts that the global transformer oil market is expected to grow from US$1.98 billion in 2015 to US$2.79 billion by 2020 at a CAGR of 7.14%. Spent oil is currently processed at two commercial plants with distinct competitive advantage delivered through very high recoveries (near 100%), producing 'as new' high quality oils at competitive cost and without environmentally harmful emissions. The process also completely eliminates PCBs, a toxic additive banned under international regulations. Hydrodec's plants are located at Canton, Ohio, US and Bomen, New South Wales, Australia. 

Hydrodec's shares are listed on the AIM Market of the London Stock Exchange. For further information, please visit www.hydrodec.com.