Issue of Equity

Surface Transforms PLC
30 April 2004


RNS Release

30th April 2004


Surface Transforms plc raises £2.7 million (net) in institutional fundraising


Surface Transforms plc, manufacturer of high-technology carbon ceramic
materials, today announces that 4,142,859 new Ordinary shares have been
conditionally placed with institutional investors at a price of 70p per share.
The placing, which was oversubscribed, raised £2.7 million after costs and
provides Surface Transforms with the funds to increase its capital investment
programme and to expand its management and technical team.

Details of the Placing

The Company is proposing to issue to institutional and other investors, up to
4,142,859 new Ordinary Shares at 70 pence per share, to raise up to £2.9 million
before expenses. The Directors anticipate that the net proceeds of the Placing,
which will amount to approximately £2.7 million, will be applied to the
Company's capital investment programme, to the expansion of its management and
technical team and to provide working capital generally. The Placing is
conditional, inter alia, on the approval of all the resolutions to be proposed
at the Extraordinary General Meeting to be held on 24th May 2004 and on
Admission.

It is the Directors' view that the Placing is the most appropriate way of
raising capital for the Company as it avoids the costs of publishing a
prospectus in connection with a public offer of shares.

Application will be made for 3,571,430 Ordinary Shares to be admitted to trading
on AIM and dealings are expected to commence between 25th and 27th May 2004.
Application will be made in due course for the remaining 571,429 Ordinary Shares
to be admitted to trading on AIM and dealings are expected to commence on or
before 5th August 2004.

Current trading

Further progress has been made by the Company since the publication of the
Interim Results on 24th February 2004.

Aircraft Brakes

The pace of the carbon fibre reinforced ceramic (CFRC) brake development
programme with Dunlop Aerospace has accelerated in recent months and Surface
Transforms is very well placed to achieve further penetration of the aircraft
braking market. The target date for the first certification flight of the
designated commercial airliner is scheduled for 2006.

Aerospace Components

The Company is in the second half of its initial development programme with the
US Air Force Research Laboratory and the Directors believe that progress to date
has been very satisfactory.

Automotive

The Company is at an advanced stage of negotiations with a leading European
supplier of automotive brakes with regard to the entering into of an agreement
for the joint development and supply of CFRC brake discs and pads. This
agreement will provide for the design, testing and supply of CFRC brake discs
and pads for use on a prestige model range of one of Europe's leading passenger
car manufacturers.

Data from tests that have been carried out by the Company indicate that CFRC
brakes have considerable technical advantages over the ferrous brake discs that
are used on all passenger cars. The principal advantages over steel brakes
being: improved wear; markedly reduced weight; and very high braking (friction)
properties.

New Applications for CFRC Technology

The Company continues to invest in order to expand and develop its CFRC
proprietary technology.

During March 2004, the UK Ministry of Defence confirmed that it intends to enter
into an initial development contract with the Company to assess the suitability
of CFRC as a ballistic protective barrier in infantry body armour and as an anti
ballistic 'skin' for armoured personnel carriers and weapon platforms.

If testing is successful the Directors believe that this will provide the
Company with an entry point into the UK defence market for ballistic protective
barriers.

Outlook

The financial outlook for the financial year ending 31st May 2004 is expected to
be in line with current market expectations. The development and licence
contracts in the aircraft and automotive fields should ensure that the business
enjoys steady progress over the next twelve months. The Company is also in the
process of reducing the product processing time and improving the response time
and flexibility to meet customer demands.

The Placing will allow the Company to accelerate the development of its
technology and invest in its technical infrastructure. It will also support a
modest capital investment programme, provide additional working capital and
allow the Board to strengthen the management and technical team. The Directors
anticipate that the above measures will result in an increase in the number of
applications for the Company's CFRC technology.

Julio Faria, Managing Director of Surface Transforms, commented:

'The placing has been a great success and we are pleased to welcome several new
institutions among our shareholders. With £2.7 million now in place, we have the
funds to accelerate growth. We can now enter new programmes and expand our
production capabilities, as well as accelerate the work we are doing on existing
programmes.'

For enquiries please contact:

Julio Faria                                   Neil Boom/Sophie Betts
Surface Transforms plc                        Gresham PR Ltd.
01928 735 498                                 020 7404 9000

Johnny Townsend/David Worlidge
John East & Partners Limited
020 7628 2200

Note to editors:
Cheshire-based Surface Transforms manufactures and develops high-tech carbon
ceramic materials such as brakes and discs which are used in high-performance
cars and aeroplanes and in other non-friction applications such as rocket
propulsion systems. Surface Transforms' ceramic materials are lightweight yet
able to withstand very high temperatures (up to 3000degreesC).

Details of the Company's business and financial performance and its share price
can be found on the Armshare icon on www.surface-transforms.com




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