Yu Group PLC New Energy Trading Arrangement (9073W)
16 Diciembre 2019 - 1:00AM
UK Regulatory
TIDMYU.
RNS Number : 9073W
Yu Group PLC
16 December 2019
16 December 2019
Yü Group PLC
(the "Group")
New Energy Trading Arrangement
Yü Group PLC (AIM; YU.), the independent supplier of utilities
to the UK corporate sector, is delighted to announce that it has
entered into a new structured trading agreement ("Hedging
Facility") with SmartestEnergy Limited ("Smartest").
The Group has, until now, relied on a number of trading
arrangements to access wholesale electricity and gas commodity
markets. Such arrangements enable the Group to hedge its position
through the forward purchase of energy commodity volume to balance
against the forecasted demand of its customer contracts. These
arrangements mitigate the Group's risk but require the Group to
post cash collateral to support the forward contracts (the main
reason for the Group listing), absorbing material levels of the
Group's existing available cash balance.
The Hedging Facility with Smartest will currently provide a
variable credit facility up to GBP13 million, to support the
Group's hedging position, leading to a corresponding benefit to the
Group's cash position. The Hedging Facility is structured so that
the credit line grows in line with the business as it scales. This
has a material benefit in reducing the working capital requirement
of the Group, allowing the Board to focus the deployment of
available funds to drive the Group's growth and enhance shareholder
value.
The Group will exclusively purchase energy commodity from
Smartest, at market competitive and transparent prices, so as to
meet its customers' requirements over the five-year term of the
Hedging Facility, and has provided certain security and
commitments, following an extensive period of due diligence, in
order to benefit from the new credit facility.
As announced in the Group's FY 2018 annual report and
subsequently, a key strategic priority of the Board has been to
reduce cash volatility, to enable a focus on other investment areas
to drive growth, whilst accessing competitive trading
arrangements.
Following a detailed review of various market opportunities with
major energy players, the Board is pleased to have concluded this
new structured arrangement which represents a major new milestone
in the Group's evolution.
It is expected that the Group will transfer existing outstanding
forward trades so that it releases the cash benefit during FY 2020,
up to an amount of GBP13 million.
Robert Groves, SmartestEnergy's CEO commented: "SmartestEnergy
is delighted to have entered into a wholesale trading partnership
with Yü Energy, one of the fastest growing and most exciting
challengers in the business energy supply market. After an
extensive period of due diligence, we were impressed with the
breadth of management team, the strategy in place to scale the
business and the available opportunities for the business. Through
this partnership, SmartestEnergy will support Yü Energy in managing
the complex risks associated with volatile and challenging market
conditions. We look forward to working together with the leadership
team at Yü Energy as they continue to grow their business."
Bobby Kalar, Chief Executive Officer of Yü Group, commented:
"Traditional trading arrangements create significant cash
collateral requirements in a declining energy commodity market, and
overcoming this barrier was the main reason the business listed in
2016. Removing cash volatility with trading counterparties removes
the need for the Group to ring fence cash. This agreement means we
no longer have a need to tie up our cash and instead use our
position to unlock new opportunities whilst scaling our customer
base. Our industry has seen some turbulent times recently and this
strategic partnership with Marubeni's UK subsidiary SmartestEnergy
supports the Company as it pursues its growth ambitions.
"I am delighted that we have concluded this new arrangement to
unlock a multi-million cash benefit with such a well-respected
strategic partner whose ambitions are in line with ours. Having
considered several options, SmartestEnergy's ethics, flexibility
and always putting the customer first made them the obvious choice.
The agreement is also future proof, so that the credit facility
grows with the business, enabling us to scale this business more
quickly and profitably. This agreement signals the start of long
and beneficial relationship between two businesses who share growth
ambitions. I look forward to providing further updates in H1 2020
after we realise the benefit in our cashflow from this major new
partnership, and after we further leverage our strong balance sheet
to drive business growth."
For further information please contact:
Yü Group PLC +44 (0) 115 975 8258
Bobby Kalar
Paul Rawson
Shore Capital +44 (0) 20 7408 4090
Edward Mansfield
Anita Ghanekar
James Thomas
Alma PR +44 (0) 20 3405 0205
John Coles
Hilary Buchanan
Helena Bogle
Notes to Editors
About Yü Group PLC
Yü Group PLC, trading as Yü Energy, is an independent supplier
of gas, electricity and water focused on servicing the business
sector throughout the UK. It has no involvement in the domestic
retail market. The Group was listed on the AIM market of the London
Stock Exchange in March 2016.
About SmartestEnergy:
SmartestEnergy is a next generation energy company with a unique
business model built on strong customer relationships and trading
expertise in the gas and power markets. As the UK's leading
purchaser of independent generation, and a licensed electricity
supplier to more than 2,500 Industrial and Commercial (I&C)
businesses, it is experienced in providing commercial agreements
for a range of businesses across different sectors. It also
provides access to the wholesale market, providing structured
credit solutions to independent suppliers, building long term
relationships by sharing the trading and risk management expertise
to underpin long term success.
SmartestEnergy is a wholly owned subsidiary of Marubeni, a
Japanese corporation listed in the Fortune Global 500 Company (No.
130 | MARUY 718.5 JPY).
smartestenergy.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
AGRCKPDQNBDBKBD
(END) Dow Jones Newswires
December 16, 2019 02:00 ET (07:00 GMT)
Yu (LSE:YU.)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Yu (LSE:YU.)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024