Haydale Graphene puts US unit into Chapter 11, seeks sale
By Josh White
Date: Monday 10 Feb 2025
(Sharecast News) - Haydale Graphene announced on Monday that it has initiated a corporate insolvency process for its US subsidiary Haydale Ceramic Technologies (HCT) under chapter 11 of the US Bankruptcy Code.
The AIM-traded company said it had filed the necessary documents in the state of Georgia, with a court hearing expected in the coming days to formalise the proceedings.
As part of the process, Haydale said it planned to sell HCT's assets through a court-supervised public auction under section 363 of the US Bankruptcy Code.
It said it saw that as the best route to maximise asset value and recover cash for the parent company, which has a £12.8m intercompany debtor balance tied to its US operations.
While several third-party firms had expressed interest in acquiring HCT's assets, there was no guarantee of financial recovery.
HCT, based in Greer, South Carolina, operates Haydale's silicon carbide and cutting tool manufacturing business, with sales offices serving North America, Europe, and East Asia.
In the year to 30 June 2024, the US business generated £3.3m in revenue, but posted a pre-tax loss of £0.8m, with net liabilities of £4.7m.
The decision to divest followed a strategic review by Haydale's reconstituted board, which said it had determined that prior management's expectations for US growth were overly optimistic.
Despite efforts to reposition the business by shifting focus from silicon carbide powder sales to advanced cutting tools, the anticipated revenue expansion failed to materialise.
The board concluded that continuing to operate HCT would be unsustainable, with losses expected to persist beyond the 2025 financial year.
Haydale said the move was part of its broader restructuring, which included the previously-announced sale of its South Korean subsidiary and its recent exit from Thailand.
The group said it would now focus exclusively on its UK-based nanomaterials business, which integrates graphene and other advanced materials into industrial and commercial applications.
It holds a portfolio of around 100 patents, and aims to improve profitability and cash flow in the 2025 financial year by eliminating loss-making operations.
Further announcements regarding the US asset sale and restructuring progress would be made in due course, the board said.
At 1135 GMT, shares in Haydale Graphene Industries were up 4.35% at 0.12p.
Reporting by Josh White for Sharecast.com.
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