Hydrodec Group plc announced that the Group has signed heads of terms with a US industrial recycling company with significant experience in handling, decommissioning and recycling solutions for used, outdated or failed electrical transformers and other utility equipment. The parties intend to create a joint venture (JV) in the US pursuant to which the JV will utilise part of the Group's existing site in Canton, Ohio to establish a facility for the purpose of dismantling and recycling pole and pad-mount electrical transformers. The JV's aim will be to combine the partner's proven access to the utilities with Hydrodec of North America's (HoNA) unique ability to produce re-usable transformer oil and generate carbon credits. By so combining, the parties wish to create a market leading re-refining business in the US. The Group's contributions to the JV will include the land, PCB licenses/permits, utilisation of carbon credits, and capital towards the construction budget. The Group's share of the capital expenditure budget is estimated at approximately US$400k (net of the contribution of land) and is subject to successful conclusion of the proposed refinancing arrangements referred to above. The JV will transfer all used transformer oil extracted at the facility to HoNA at no cost, and the Group's JV partner will sell all the used oil it secures outside of the JV's activities to HoNA at cost. It is expected that the volumes of oil will be material in the context of HoNA's existing capacity (c. 25% of its nameplate capacity of 12m US gallons). In return, the JV partner will be entitled to receive 10% of the annual net profits of HoNA. The partner will also be appointed as HoNA's strategic collection partner in respect of the sourcing of used oil and the associated carbon credit programme, leveraging its established relationships with US utilities. The heads of terms are not legally binding and there can be no guarantee that the JV and transactions contemplated therein will be consummated.