TIDMNGR
RNS Number : 9075G
Nature Group PLC
07 March 2018
This announcement contains inside information
Nature Group plc
("Nature Group" or the "Group")
Trading Update
Nature Group PLC (AIM:NGR), the provider of port reception
facilities and waste treatment solutions for the oil, marine and
process industries, provides an update on current operations and
trading in the year ended 31 December 2017 ("FY2017") and the
Group's current financial position.
Maritime
As previously announced, trading during the first six months of
FY2017 was challenging, and those difficult conditions continued
through the second half of the year. However, the Board's decision
to increase the Group's focus on the Maritime division, a result of
the business-wide strategic review initiated by the Board last year
in response to the continued, disappointing performance of the
Group's activities, has now begun to yield positive results.
The financial performance of the Group's operations in Rotterdam
showed particular signs of improvement towards the end of FY2017,
with margins being enhanced as a result of various operational
measures implemented through the period, and the Board is pleased
to note that this trend has continued into the first two months of
2018.
In the US, the Company announced the sale of a 50 per cent.
interest in its US subsidiary, Nature Environmental & Marine
Services LLP ("NEMS"), to Ramky Enviro North America, LLC, a member
of the Ramky Group ("Ramky") for an initial consideration of US1.6
million, immediately improving the cash position of the Company.
Ramky is the market leader in India for hazardous waste management
services, with more than 500 project locations across 23 States,
and is also active globally, with activities in U.S.A, Singapore,
Saudi Arabia, UAE, Vietnam, China, West Africa, and Peru.
Following the strategic investment in the Group's US subsidiary
by Ramky Enviro North America, LLC, a member of the Ramky Group
("Ramky"), in November 2017, improvement plans are now being
jointly developed and are focused on improving both the financial
performance of the business and its capital structure and future
financing requirements, owing to the termination of existing local
banking facilities.
Oil & Gas
The Group's Oil & Gas division, which has four units
currently deployed with eight operators, continues to experience
difficult trading conditions, notwithstanding a modest recovery in
the oil price during the period. Whilst the Group was actively
engaged in discussions and trials with a number of operators in the
second half of FY2017, these have yet to be converted into firm
contracts. Maintaining a presence in the sector, and exposure to
the potential upside any recovery in drilling activity may bring,
continues to put pressure on the Company's overall cash flow and
its limited financial resources.
Recognising this, the Board has been actively engaged in a
process to dispose of Nature Oil & Gas Holding, its
wholly-owned subsidiary, and is now in advanced discussions with a
preferred bidder having reached agreement on indicative terms and
pricing (the "Proposed Sale"). The Proposed Sale is consistent with
the Board's strategy to increase the Group's focus on the Maritime
division and its commitment to continually evaluate the Group's
cost-base to ensure that it is appropriate for its current
operations, activities and financial resources.
Completion of the Proposed Sale is subject to, among other
things, continued negotiation, a due diligence period and the entry
of the parties into definitive, binding agreements. Accordingly,
whilst these discussions are at an advanced stage, shareholders are
advised that there can be no certainty that the Proposed Sale will
be concluded on the terms indicated or at all. Furthermore, owing
to the outstanding conditionality, neither the proposed counter
party nor the indicative sale price are being disclosed at this
time.
Group Financial Position
Despite the improvement in the trading of the Maritime division
and the significant progress made in restructuring and reducing
Group and divisional overheads, the overall financial position of
the Group remains uncertain. In order to address the Group's
immediate cash flow issues, and to allow it to progress discussions
relating to the Proposed Sale, the Board has secured a verbal
waiver from its lender, DNB, deferring the repayment of lease and
debt financing facilities totalling GBP1 million provided to Nature
Oil & Gas Holding until the end of April 2018, such waiver
being conditional on the Proposed Sale.
In the event that the Proposed Sale is not concluded before late
April 2018, and no further waiver is provided by DNB, the Board
advises that Nature Group is likely to face serious liquidity
constraints and that additional funding would need to be secured to
ensure the continuity of the Group.
As part of its review of possible funding options should the
Proposed Sale not proceed, the Board is exploring the feasibility
of utilising as collateral, or securing the early release from
escrow, of all or part the deferred consideration of GBP700,000 due
to the Group in connection with the sale of its operations in
Gibraltar, which amount is scheduled to be released at the
beginning of 2019.
Further updates will be issued in due course.
Berend van Straten, Chairman of Nature Group, commented:
"2017 was another difficult year for Nature Group and we
continue to face significant headwinds, particularly in our Oil
& Gas division.
However, we are encouraged that steps taken by the Board during
the period to identify the operational and structural issues
problems and to define and begin to implement a new strategy are
beginning to yield positive results.
There is much more work to do to ensure Nature Group has a
viable future, and the proposed sale of the Oil & Gas division
is a vital step in achieving that and to addressing the Group's
urgent, short-term cash requirements."
For further information:
Nature Group PLC
Andreas Drenthen, CEO Tel: + 31 653261484
Berend van Straten, Chairman Tel: + 31 626805605
Cenkos Securities plc
Neil McDonald Tel: +44 (0)131 220 9771 /
+44 (0)207 397 1953
Beth McKiernan Tel: +44 (0)131 220 9778 /
+44 (0)207 397 1950
Pete Lynch Tel: +44 (0)131 220 9772
This information is provided by RNS
The company news service from the London Stock Exchange
END
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