Additional Listing
To be embargoed until 7.05am
31 July 2007
Surface Transforms Plc
("Surface Transforms" or "the Company")
Proposed placing of 5,000,000 new ordinary shares of 1p each at 20p per share
The Company announces that John East & Partners Limited ("John East &
Partners"), on behalf of the Company, has placed 5,000,000 new ordinary shares
("the Placing Shares") at 20p per Placing Shares with institutional and other
investors ("the Placing"). The Placing is conditional, inter alia, on
shareholders approval at an extraordinary general meeting of the Company to be
held at 12.00p.m. on 24 August 2007 and admission of AIM of the Placing Shares.
Background to and reasons for the Placing
In my Chairman's Statement that accompanied the interim results for the six
months ended 30 November 2006, I highlighted that the Company had made
significant financial and operational progress within the automotive ceramic
brake market and in completing the ST Tech 2 production process.
The Company has made further progress in the second half of the financial year,
in particular, within the automotive aftermarket where, alongside Stop Tech Inc
of the US, the Company recently signed an agreement with Mov' it GmBH for the
European Market. As we start the current financial year, the Company has supply
relationships with three automotive customers which can be relied upon to
increase substantially the demand for ceramic discs in future years. A
comprehensive update of the current trading position of the Company is
contained in my Chairman's Statement which accompanies the preliminary results
for the year ended 31 May 2007.
The Company's cash resources as at 31 May 2007 were £878,971, which provides
sufficient working capital for at least the next 12 months. However, to build
on the progress made by the Company in the last financial year, accelerate the
adoption of the Company's carbon ceramic discs in the wider automotive brake
market and reduce the direct cost of manufacturing the discs, the Company is
proposing to effect the Placing.
The proceeds of the Placing, which amount to approximately £895,000 after
expenses, will allow the Company to make the necessary capital investments to
continue and accelerate its product development and provide additional working
capital.
It is the board of directors' view that the Placing is a very efficient way of
providing additional working capital for the Company. The cost of funds raised
via the Placing will be substantially lower compared with an open offer or
rights issue to Shareholders, which would require the publication of a detailed
document and would cost the Company a significantly higher percentage of the
funds being raised.
Directors' participation in the Placing
Kenneth Baker and Kevin D'Silva have conditionally agreed to subscribe for
50,000 and 100,000 ordinary shares in the Placing, respectively. Immediately
following the admission of the Placing Shares to trading on AIM Kenneth Baker
will hold 90,000 ordinary shares and Kevin D'Silva will hold 256,986 ordinary
shares, which will represent 0.47 per cent. and 1.35 per cent., respectively,
of the enlarged issued share capital.
In addition, a member of the senior management team has conditionally agreed to
subscribe for 25,000 ordinary shares in the Placing, which will represent 0.13
per cent. of the enlarged issued share capital.
Following the proposed Placing, the Company will have 19,030,748 ordinary
voting shares in issue. It is intended that application will be made for the
Placing Shares to be admitted to trading on AIM. Dealings are expected to
commence on 28 August 2007.
In addition, the Company announces that John East & Partners Limited has been
appointed as joint broker to the Company with immediate effect.
For enquiries, please contact:
Surface Transforms plc Tel: 0151 356 2141
Kevin Johnson 07802 306956
Kevin D'Silva
John East & Partners Limited (Nomad and Joint Tel: 020 7628 2200
Broker)
Simon Clements
David Worlidge
Teather & Greenwood Ltd (Joint Broker) Tel: 020 7426 9000
Sindre Ottesen
Mark Dickenson
Redmayne Bentley (Private client broker)
Lucy Clapham
Simon Flather
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