Hardide Regulatory News (HDD)

21 Aug 2007 07:00

Hardide PLC21 August 2007 Press Release 21 August 2007 Hardide plc ("Hardide" or "the Company" or "the Group") Hardide to fast track Aerospace Market development plans Hardide plc (AIM:HDD), the provider of unique surface engineering technology, ispleased to announce that it is to fast track its plans to penetrate theaerospace sector in order to take advantage of significant new market conditionsand blue chip customer opportunities. The move has been prompted by the new EU REACH1 environmental legislation onchemicals which has driven many manufacturers to source alternative coatingtechnologies to replace hard chrome. In addition, Hardide has been progressingalternative coating studies and/or test programmes with customers such asMessier-Dowty. This has resulted in the Company deciding to accelerate its fiveyear plan to grow its market share within the aerospace industry. Hardide iscurrently 18 months into the plan which has, to date, included success insecuring approved supplier status with BAE Systems. The new timescale willcompact the programme to complete within the next year and a half, and willinclude securing further industry approvals and registrations. Hardide's accelerated growth in the aerospace sector will be funded by raisingup to £1 million of debt; the first £500,000 of which is through a two yearfixed term loan from an existing shareholder, the Boyce Group, who constitute arelated party under the AIM Rules. The loan is to take the form of anassignable company debenture; will have an interest rate of base plus twopercent; attracts no penalty for early repayment; and will be repayable ondemand on a change of control of the Company. The deal also includes the optionfor the Boyce Group to subscribe for £500,000 worth of shares at 12p per share,exercisable for a period of up to three years from 21 August 2007. Thedirectors, having consulted with Seymour Pierce, the Company's nominatedadviser, consider the terms to be fair and reasonable insofar as shareholdersare concerned. The Company will make an announcement regarding the balance ofup to a further £500,000 of debt in due course. The additional working capital provided by the loan will support the creation ofan aerospace business unit by funding a dedicated team of engineering, technicaland quality specialists as well as IT, measuring, metrology and toolingequipment for the unit. The Company has parts in test with five of the largest global aircraftmanufacturers and systems designers and is in application-specific discussionswith a further ten. Jim Murray-Smith, Chief Executive of Hardide plc, said: "Hardide has generateda lot of interest and excitement among the industry's leading players. Over thelast 18 months, the prospect of the new REACH regulations has prompted manymanufacturers to replace hard chrome with alternative technologies, a number ofwhich are not meeting the required standards. Subsequent discussions withpotential customers have concluded that Hardide offers a very attractivepossible alternative if we can fast track our development programme. Wetherefore have decided to leverage significantly more resource into the Companyso that we are able to capitalise on these ripe conditions. "I am confident that this sector, should we gain the necessary approvals,together with our continued success in expanding our oil and gas business, willprovide an even stronger platform to deliver substantial growth for the Companyover the next 18 months from Hardide's operating facilities in the UK and, indue course, the US." The aerospace industry is a growth sector with the UK host to the largestaerospace industry outside of the US and demand for freight and passengertraffic increasing year on year. In 2006, the UK industry had a turnover of£19.82 billion, up 5.5% in real terms from 2005, with new orders increasing bynearly 6% to £26.2 billion. 2 - Ends - 1 Registration, Evaluation, Authorisation and Restrictions of Chemicals,effective from 1 June 2007 2 UK aerospace industry survey of 2006 undertaken by the Society of BritishAerospace Companies (SBAC) in 2007 For further information:Hardide plcJim Murray Smith, Chief Executive Tel: +44 (0) 1869 353 830jmurray-smith@hardide.comJackie Robinson, Head of Communications Tel: +44 (0) 1869 353 830jrobinson@hardide.com www.hardide.com Seymour PierceNicola Marrin, Corporate Finance Tel: +44 (0) 20 7107 8000 Media enquiries:AbchurchHenry Harrison-Topham / Chris Lane Tel: +44 (0) 20 7398 7702henry.ht@abchurch-group.com www.abchurch-group.com Notes to editors Hardide provides and applies tungsten carbide-based coatings to a wide range ofengineering components. The Company's patented technology is unique in that itcombines both abrasion and corrosion resistant properties in one coating. Whenapplied to components, the technology is proven to offer dramatic cost savingsthrough reduced downtime and extended component life. Customers include leadingcompanies operating in oil and gas exploration and production, valve and pumpsmanufacturing, general engineering and aerospace. This information is provided by RNS The company news service from the London Stock Exchange