Last checked at 22 Jul 2014 07:00
22 July 2014
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.
FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF HARDIDE PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
Hardide plc
("Hardide" or the "Company")
Conditional Placing of 167,875,000 new Ordinary Shares to raise £2.7 million
Hardide plc, provider of advanced surface-coating technology, today announces that it has conditionally raised £2.7 million before expenses, by the placing (the "Placing") for cash by finnCap, acting as agent for the Company, of 167,875,000 new ordinary shares of 0.1 pence each ("Ordinary Shares") (the "Placing Shares") at 1.6 pence per Placing Share (the "Issue Price").
Summary of the Placing
· Placing of 167,875,000 new Ordinary Shares at 1.6 pence to raise £2.7m before expenses (£2.5m net of expenses)
· Support from new and existing institutional shareholders
· Fundraising subject to approval of the Company's shareholders at a General Meeting to be held on 14 August 2014
· Proceeds to be used for investment in additional capacity in the UK and a new facility in the US
Commenting on the placing, Philip Kirkham, Chief Executive of Hardide, said:
"We are delighted to have received such strong support from existing and new institutional shareholders. This fundraising will allow Hardide to take advantage of the increasing demand for Hardide coatings from the UK, Europe and North America."
Background to and reasons for the Placing
The Directors believe that overall demand for the Company's products has increased recently due to greater business development efforts, recovery in demand from existing customers and the generation of new accounts. Examples of such developments include the recently-announced contract with General Electric and the further progress made with testing by Airbus, specifically the Group's Hardide-A coating as a potential alternative to hard chrome plating in certain aerospace applications. The Company has been informed by Airbus of completion of the first stages of testing of its coating following a technical performance review of Hardide-A in a laboratory environment, which has encouraged Airbus to investigate further its technical performance capabilities for potential use on some specific Airbus aircraft components. The Board believes this represents an important step towards the possible approval of the coating for use on component parts for Airbus aircraft.
In order to meet future projected demand, the Directors believe the Company will require additional capacity both in the UK and the US, giving a dual site capability, particularly for serving aerospace markets. The aim is to provide security of supply and to satisfy the logistical needs of current and future customers, particularly in North America. The Directors also believe that a strengthened balance sheet will allow for greater customer confidence when considering long-term business with the Company.
The Company has therefore been considering possible ways to achieve the objectives set out above and to further enhance growth and increase Shareholder value in the longer term. The Placing is believed by the Board to be a necessary step towards realising this strategy.
Use of Proceeds
The Group intends to use the net proceeds of the Placing to invest in capacity to meet future projected demand, including an additional coating reactor in the UK which the Board expects will increase available capacity there by approaching 50 per cent., and the creation of a processing facility in North America.
It is intended by the Group that installation of capacity at the North American facility will be phased to match demand as it develops. The current plan envisages three coating reactors which, once in place, the Directors believe would provide a physical capacity equivalent to the expanded capacity at the UK site. The Company is in discussions with local government representatives on possible grant aid to support the creation of the North American facility.
In addition, the net proceeds of the Placing will be used to cover the projected start-up losses of the North American facility as well as the initiation, in the medium term, of a research and development function in the UK and to grow the Company's global business development team.
General Meeting
A notice convening a General Meeting, to be held at the offices of finnCap Ltd, 60 New Broad Street, London EC2M 1JJ at 11.00 a.m. on 14 August 2014 is being posted to Shareholders today. At the General Meeting, resolutions will be proposed to: (i) authorise the Directors, pursuant to section 551 of the Act, to allot shares or grant rights to subscribe for or convert any security into shares in the Company up to a maximum nominal value of £420,208 representing approximately one-third of the nominal value of the Enlarged Share Capital which will be in substitution for the Company's existing authority granted at its Annual General Meeting held in February this year; and (ii) empower the Directors to dis-apply statutory pre-emption rights in respect of, inter alia, the allotment of the Placing Shares. These authorities will expire at the conclusion of the next Annual General Meeting of the Company to be held after the passing of the Resolutions.
The purpose of seeking Shareholder approval to the taking of authorities in addition to those required for the Placing is to allow the Directors to have available to them for allotment, following the Placing, a number of Ordinary Shares, which is proportionally equivalent to that approved for allotment on a non pre-emptive basis at the last Annual General Meeting of the Company. While the Directors have no present intention of exercising the additional authorities proposed to be conferred by the Resolutions, they believe that the granting of such authorities will preserve the Board's flexibility to take advantage of further opportunities when they arise.
Details of the Placing
The Placing, which is not being underwritten, has been undertaken pursuant to the Placing Agreement. Under the terms of the Placing Agreement finnCap has agreed to use its reasonable endeavours to procure institutional and other investors to subscribe for Placing Shares.
The Placing Agreement is conditional on, amongst other things:
· the passing of the Resolutions (without material amendment) at the General Meeting; and
· Admission becoming effective by not later than 8.00 a.m. on 15 August 2014 (or such later time and/or date as the Company and finnCap may agree (being not later than 8.00 a.m. on 28 August 2014)).
Admission
Application will be made for Admission to occur and for dealings to commence in the Placing Shares on 15 August 2014. The Placing Shares will rank pari passu with the existing Ordinary Shares currently traded on AIM. Following Admission, there will be 1,260,626,304 Ordinary Shares in issue.
Unless otherwise defined herein, terms are as defined in the Circular posted to Shareholders on 22 July 2014 and available on the company's website http://www.hardide.com/investor-relations/
For further information please contact:
Hardide plc Tel: +44 (0) 1869 353830
Philip Kirkham, CEO
Peter Davenport, Finance Director
finnCap Ltd Tel: +44 (0) 20 7220 0500
Stuart Andrews / Grant Bergman / James Thompson
PLACING STATISTICS
Number of Existing Shares | 1,092,751,304 |
Number of Placing Shares being conditionally placed on behalf of the Company | 167,875,000 |
Number of Ordinary Shares in Issue immediately following Admission(1) | 1,260,626,304 |
Placing Price | 1.6 pence |
Estimated net proceeds of the Placing receivable by the Company | £2.5 million |
Placing Shares as a percentage of the Enlarged Share Capital(1) | 13.3 per cent. |
Market capitalisation of the Company at Admission at the Placing Price(1) | £20.2 million |
(1) Assuming that, other than the Placing Shares, no new Ordinary Shares are issued between the date of this document and Admission.
TIMETABLE OF PRINCIPAL EVENTS
2014
Latest time and date for receipt of Forms of Proxy for the General Meeting | 11.00 a.m. on 12 August |
Time and date of General Meeting | 11.00 a.m. on 14 August |
Admission and commencement of dealings in Placing Shares | 8.00 a.m. on 15 August |
CREST accounts credited in respect of Placing Shares | 15 August |
Despatch of definitive share certificates for Placing Shares | 28 August |
THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR WITH ANY REGULATORY AUTHORITY OR UNDER THE LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, RE-SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND OTHERWISE IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. NEITHER THE US SECURITIES AND EXCHANGE COMMISSION NOR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES HAS APPROVED OR DISAPPROVED OF AN INVESTMENT IN THE PLACING SHARES OR PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THE CONTENTS OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.
This announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in the United States, Australia, Canada, South Africa, Japan or any other jurisdiction in which such offer, solicitation or sale is or may be unlawful (a "Prohibited Jurisdiction"). This announcement and the information contained herein are not for release, publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction. This announcement has been issued by and is the sole responsibility of the Company.
No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by finnCap or by any of its respective Affiliates, directors, officers, employees or agents as to, or in relation to, the contents of this announcement, or any other written or oral information made available to or publicly available to any interested party or its advisers, and any responsibility or liability therefor is expressly disclaimed.
finnCap, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of finnCap or for providing advice to any other person in relation to the Placing or any other matter referred to herein. Apart from the responsibilities and liabilities, if any, which may be imposed upon finnCap by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, finnCap does not accept any responsibility whatsoever or makes any representation or warranty, express or implied, concerning the contents of this announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Placing Shares or the Placing, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. finnCap accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this announcement or any such statement.