Accsys assumes ownership of Tricoya Entities in consortium restructure

(Alliance News) - Accsys Technologies PLC on Wednesday said it had acquired full ownership of ...

Alliance News 2 November, 2022 | 2:49PM
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(Alliance News) - Accsys Technologies PLC on Wednesday said it had acquired full ownership of Tricoya Entities in return for company shares, following a restructuring prompted by considerable delays at the Hull construction site.

The London-based wood building products manufacturer previously managed the Tricoya Hull project alongside its consortium partners in Tricoya UK Ltd.

However, on Wednesday, the company said it had reached an agreement with the consortium to acquire 100% ownership of Tricoya Entities, including the construction project at Hull, in return for 11.9 million new Accsys shares.

These represent 5.7% of Accsys's current issued share capital, and based on the share price at close of trading on November 1, a value of EUR9.8 million.

The issuance of new shares was followed by a drop in the firm's share price. Accsys shares were trading 7.8% lower at 64.97 pence each in London on Wednesday afternoon.

INEOS Acetyls Investments Ltd and Medite, as commercial partners, will retain their existing supply and offtake agreements respectively.

Furthermore, NatWest Group PLC has agreed to restructure its Tricoya UK debt facility, lowering the principal amount to a total of EUR6 million, under a new 7-year term.

Accsys said the new agreement would give it greater autonomy over the management of the Tricoya Hull project moving forwards.

However, in the short-term, lengthy delays and knock-on costs are likely to remain prevalent issues.

Accsys currently intends to freeze the construction and commissioning of the plant for at least six months, in order to reduce the cash impact from Hull over financial year 2023 ending March 31.

Two separate firms were engaged to assess the capital costs for the remaining work needed on the project. Specialists suggested that additional costs are likely to be around EUR35 million, bringing the total capital cost of the project to EUR138 million, up from the previously estimated maximum of EUR103 million.

Accsys expected monthly costs during the hold period of EUR500,000, to go towards the ongoing security, maintenance and care of the site.

The Tricoya production process requires proportionately more acetic anhydride per unit value of wood chip produced than the Accoya production process.

Accsys said the hold period would have the strategic benefit of delaying and preventing the Hull plant from coming into operation during volatile and historically high gas and acetic anhydride prices.

It will only commit capital to complete the plant if it is satisfied that it can expect to receive an appropriate return on further investment.

"Accsys is pleased to take over 100% of the Tricoya project. This provides us certainty over the project, gives us full control and the ability to complete the construction on our terms, at the right time," said Chief Executive Officer Rob Harris.

"Whilst that time is not right now, the validation work undertaken has demonstrated that the opportunity to produce Tricoya at attractive margins in the future remains strong. We are also pleased to move ahead with the continued support of INEOS and Medite as supply and offtake partners."

At September 30, Acssys held adjusted net debt of EUR62 million, widened from EUR55 million on March 31. This figure is expected to decrease by around EUR9.5 million as a result of the restructure, following the reduction of the NatWest facility from EUR15 million to EUR6 million.

Tricoya Entities are currently loss making, as the plant is not yet operational.

By Holly Beveridge; hollybeveridge@alliancenews.com

Copyright 2022 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Accsys Technologies PLC 58.50 GBX 1.74 -
NatWest Group PLC 319.30 GBX 0.47

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