TIDMSCE
RNS Number : 4208J
Surface Transforms PLC
09 April 2020
THE INFORMATION COMMUNICATED WITHIN THIS ANNOUNCEMENT IS DEEMED
TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATIONS (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN
THE PUBLIC DOMAIN.
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, INTO OR FROM THE
UNITED STATES, AUSTRALIA, CANADA, JAPAN, SINGAPORE, THE REPUBLIC OF
SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE,
PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
FURTHER, THIS ANNOUNCEMENT IS MADE FOR INFORMATION PURPOSES ONLY
AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR SOLICITATION
TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE SHARES IN SURFACE
TRANSFORMS PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL.
Surface Transforms plc
("Surface Transforms " or the "Company ")
Placing raising GBP1.4 million
and
Open Offer to raise up to GBP0.3 million
Surface Transforms (AIM:SCE), manufacturers of carbon fibre
reinforced ceramic materials, is pleased to announce that Cantor
Fitzgerald Europe and finnCap Ltd, on behalf of the Company, have
successfully placed 10,806,995 new ordinary shares of 1p each in
the Company ("Ordinary Shares") (the "Placing Shares") at a price
of 13.0 pence per share (the "Issue Price"), raising gross proceeds
of approximately GBP 1.4 million pursuant to its existing authority
to issue equity for cash (the "Placing"), conditional on admission
of the Placing Shares to trading on AIM ("Placing Admission").
Cantor Fitzgerald is acting as Nominated Adviser and Joint
Broker and finnCap is acting as Joint Broker in connection with the
Placing.
In addition to the Placing, the Company intends to provide all
Qualifying Shareholders with the opportunity to subscribe for an
aggregate of up to 2,307,692 new Ordinary Shares (the "Open Offer
Shares") at the Issue Price of 13.0 pence per share, to raise up to
approximately GBP 0.3 million (before expenses), on the basis of 1
New Ordinary Share for every 58.97624813 Existing Ordinary Shares
held on the Record Date (the "Open Offer" together with the
Placing, the "Fundraising"). Shareholders subscribing for their
full entitlement under the Open Offer may also request additional
Open Offer Shares through the Excess Application Facility.
The Issue Price represents a discount of approximately 16 per
cent. to the price of 15.5 pence per existing Ordinary Share, being
the Closing Price on 8 April 2020.
Use of proceeds and reasons for the Fundraising
The net proceeds of the Placing will provide Surface Transforms
with sufficient working capital to enable it to continue operating
should COVID-19 impact the business in a material manner. The Board
has modelled various scenarios and a working capital buffer of
GBP1.3 million is sufficient even were forecast revenues to fall
approximately 50 per cent. to GBP1.6 million for the year ending 31
December 2020.
As set out in the Company's COVID-19 Update on 27 March 2020,
the Company remains operational and is manufacturing brake discs
with sufficient raw material and component inventory to continue to
do so for some months. Since the start of the year, the Company has
not yet received any cancellations or OEM deferments of
pre-contracted purchases.
In addition, the Company is extremely pleased with recent
discussions and progress made with other new OEMs as part of its
prospective contract pipeline of GBP50 million per annum during the
next five years. Since the start of the financial year, no new
nominations have been made but should one or more be awarded to
Surface Transforms, they would likely be material.
However, given the rapid and continuing spread of COVID-19,
together with the various government mitigating actions across the
globe, there can be no guarantee that future expected orders will
not be deferred or cancelled, and furthermore, currently contracted
start-of-production (SOP) dates of new OEM vehicles, could be
delayed. The Board has responded quickly to the challenges of the
COVID-19 outbreak, implementing various cash retention initiatives
including:
- Furloughing approximately 50% of the Company's employees to
reduce the Company's short-term operational cost base;
- A review of the Company's operational cost base implementing
some further variable cost reductions and payment holidays;
- Executive director remuneration being reduced by 10% for not
less than 6 months, and the non-executive directors' remuneration
being reduced by 20% for not less than 3 months;
- Cancellation of the bonus scheme for executive directors and
the senior management team for the current financial year;
- Delaying any non-essential capital expenditure; and
- Ceasing any non-essential other expenditure.
The Company has also applied for a Coronavirus Business
Interruption Loan ("CBIL") but does not yet know whether their
application has been successful. Even if the application is
successful, there can be no guarantee that the full amount of the
loan applied for will be awarded. However, given the various
actions taken and being taken by the Board, the Board is confident
the Company will have sufficient working capital to navigate a
significant reduction in revenues, even if the CBIL application is
unsuccessful.
The Placing will enable the Company to focus on fulfilling its
existing customer contracts and being nominated on new OEM cars
without distractions on the financial health of the business.
Whilst a substantial proportion of the Company's employees are
being temporarily furloughed, the Board believe that the remaining
team will be able to continue to meet the key milestones as set out
in the existing OEM long-term contracts.
The remaining group of non-furloughed senior management,
engineers and developers can continue progressing all existing
engineering on the Company's other new OEMs as part of its
prospective contract pipeline; were a greater number of staff
furloughed, the Board consider there would be a risk that current
discussions and activity with other new OEMs would curtail
considerably.
Related Party Transactions
Canaccord Genuity Wealth Management Limited, as a substantial
shareholder of the Company, is subscribing for 4,153,845 Placing
Shares, which constitutes a related party transaction under the AIM
Rules for Companies.
Mr. Richard Sneller, as a substantial shareholder of the
Company, is subscribing for 3,076,923 Placing Shares, which
constitutes a related party transaction under the AIM Rules for
Companies.
David Bundred, Richard Gledhill and Kevin D'Silva, all of whom
are directors of the Company ("Directors"), have confirmed they are
subscribing for in aggregate 1,346,153 Placing Shares, whilst Kevin
Johnson has undertaken to apply for 192,308 Open Offer Shares (the
"Directors' Participation"), which constitutes a related party
transaction under the AIM Rules for Companies.
Accordingly, only Michael Cunningham is considered to be an
independent director of the Company for the purposes of AIM Rule
13. Having consulted with the Company's nominated adviser, Michael
Cunningham considers that the terms of the Directors' Participation
as well as the participation by Canaccord Genuity Wealth Management
Limited and, Mr. Richard Sneller are fair and reasonable insofar as
shareholders are concerned.
The Directors' interests as at today and following completion of
the Fundraising are as follows:
Existing Interest Open Offer Interest
beneficial Placing in Ordinary Shares in Ordinary
interest Shares Shares after to be Shares
in Ordinary subscribed Placing applied after Open
Director Shares % for Admission % for Offer Admission(3) %(3)
David
Bundred 894,641 0.66% 115,384 1,010,025 0.69% - 1,010,025 0.68%
Kevin
Johnson 799,000 0.59% - 799,000 0.54% 192,308 991,308 0.66%
Richard
Gledhill(1) 13,431,755 9.88% 1,153,846 14,585,601 9.93% - 14,585,601 9.77%
Kevin
D'Silva(2) 1,129,295 0.83% 76,923 1,206,218 0.82% - 1,206,218 0.81%
Michael
Cunningham 100,000 0.07% - 100,000 0.07% - 100,000 0.07%
(1) Held as to 10,341,433 Ordinary Shares through his investment
vehicle Group-14 LTD
(2) Held in his SIPPs.
(3) Assuming Open Offer applications in total for the full
number of Open Offer Shares available
Admission and Total Voting Rights
The Placing Shares will, when issued, rank pari passu in all
respects with the existing Ordinary Shares of the Company.
Application will be been made for the 10,806,995 Placing Shares to
be admitted to trading on AIM and accordingly dealings are expected
to commence at 8.00 a.m. on 17 April 2020. Following Placing
Admission, the total number of voting rights in the Company will be
146,906,011 and shareholders may use this figure as the denominator
for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest
in, the Company under the FCA's Disclosure Guidance and
Transparency Rules.
Any Open Offer Shares subscribed for under the Open Offer are
expected to be admitted to trading on AIM on 4 May 2020 in
accordance with the timetable set out in this Announcement . A
further announcement in respect of the Open Offer Admission will be
made in due course.
Open Offer and posting of Circular
Alongside the Placing, the Company is pleased to announce that
it is also providing the opportunity for Qualifying Shareholders to
participate in the Open Offer to raise up to approximately GBP0.3
million gross of expenses. The circular setting out full details of
the Open Offer ("Circular") will be made available on the Company's
website at www.surfacetransforms.com and posted to shareholders on
14 April 2020.
The proposed Issue Price of 13.0 pence per Open Offer Share is
the same price as the price at which the Placing Shares are being
issued pursuant to the Placing.
Qualifying Shareholders may subscribe for Open Offer Shares in
proportion to their holding of Existing Ordinary Shares held on 8
April 2020 (the "Record Date"). Shareholders subscribing for their
full entitlement under the Open Offer may also request additional
Open Offer Shares as an Excess Entitlement, up to the total number
of Open Offer Shares available to Qualifying Shareholders under the
Open Offer.
The issue and allotment of the Open Offer Shares will not exceed
the Company's existing authorities and therefore does not require
Shareholder approval.
The Open Offer is conditional, amongst other things, on the
following:
i. completion of the Placing;
ii. the Placing Agreement not being terminated prior to Placing
Admission and becoming and being declared otherwise unconditional
in all respects; and
iii. Open Offer Admission becoming effective on or before 8.00
a.m. on 4 May 2020 (or such later date and/or time as the Company,
Cantor Fitzgerald and finnCap may agree, being no later than 15 May
2020).
Open Offer Entitlement
On, and subject to the terms and conditions of the Open Offer,
the Company invites Qualifying Shareholders to apply for their Open
Offer Entitlement of Open Offer Shares at the Issue Price. Each
Qualifying Shareholder's Open Offer Entitlement has been calculated
on the following basis:
1 Open Offer Share for every 58.97624813 Existing Ordinary
Shares held at the Record Date
Open Offer Entitlements will be rounded down to the nearest
whole number of Ordinary Shares.
Excess Application Facility
Qualifying Shareholders are also invited to apply for additional
Open Offer Shares (up to the total number of Open Offer Shares
available to Qualifying Shareholders under the Open Offer) pursuant
to an Excess Application Facility. Any Open Offer Shares not issued
to a Qualifying Shareholder pursuant to their Open Offer
Entitlement will be apportioned between those Qualifying
Shareholders who have applied under the Excess Application Facility
at the sole discretion of the Board, provided that no Qualifying
Shareholder shall be required to subscribe for more Open Offer
Shares than he or she has specified on the Application Form or
through CREST.
The Open Offer Shares will, when issued and fully paid, rank
pari passu in all respects with the Ordinary Shares in issue at
that time, including the right to receive all dividends and other
distributions declared, made or paid after the date of Open Offer
Admission.
Qualifying Shareholders should note that the Open Offer is not a
"rights issue". Invitations to apply under the Open Offer are not
transferable unless to satisfy bona fide market claims. Qualifying
non-CREST Shareholders should be aware that the Application Form is
not a negotiable document and cannot be traded. Qualifying
Shareholders should also be aware that in the Open Offer, unlike in
a rights issue, any Open Offer Shares not applied for will not be
sold in the market nor will they be placed for the benefit of
Qualifying Shareholders who do not apply for Open Offer Shares
under the Open Offer.
Settlement and dealings
Application will be made to the London Stock Exchange for Open
Offer Admission of the Open Offer Shares. It is expected that such
Open Offer Admission will become effective and that dealings will
commence at 8.00 a.m. on 4 May 2020.
Overseas Shareholders
The Open Offer Shares have not been and are not intended to be
registered or qualified for sale in any jurisdiction other than the
United Kingdom. Accordingly, unless otherwise determined by the
Company and effected by the Company in a lawful manner, the
Application Form will not be sent to Shareholders with registered
addresses in any jurisdiction other than the United Kingdom since
to do so would require compliance with the relevant securities laws
of that jurisdiction. The Company reserves the right to treat as
invalid any application or purported application for Open Offer
Shares which appears to the Company or its agents or professional
advisers to have been executed, effected or despatched in a manner
which may involve a breach of the laws or regulations of any
jurisdiction or if the Company or its agents or professional
advisers believe that the same may violate applicable legal or
regulatory requirements or if it provides an address for delivery
of share certificates for Open Offer Shares, or in the case of a
credit of Open Offer Shares in CREST, to a CREST member whose
registered address would not be in the UK.
Notwithstanding the foregoing and any other provision of the
Circular or the Application Form, the Company reserves the right to
permit any Qualifying Shareholder to apply for Open Offer Shares if
the Company, in its sole and absolute discretion, is satisfied that
the transaction in question is exempt from, or not subject to, the
legislation or regulations giving rise to the restrictions in
question.
This Announcement and the Circular together with the
accompanying Application Form, in the case of Qualifying non-CREST
Shareholders, contains the terms and conditions of the Open
Offer.
If a Qualifying Shareholder does not wish to apply for Open
Offer Shares he should not complete or return the Application Form
or send a USE message through CREST.
Qualifying non-CREST Shareholders
If you are a Qualifying non-CREST Shareholder you will receive
an Application Form which gives details of your Open Offer
Entitlement (as shown by the number of the Open Offer Shares
allocated to you). If you wish to apply for Open Offer Shares under
the Open Offer you should complete the Application Form in
accordance with the procedure for application set out in the
Circular and on the Application Form itself. The completed
Application Form, accompanied by full payment, should be returned
by post to Link Asset Services, Corporate Actions, The Registry, 34
Beckenham Road, Beckenham, Kent, BR3 4TU so as to arrive as soon as
possible and in any event no later than 11.00 a.m. on 30 April
2020.
Qualifying CREST Shareholders
Application will be made for the Open Offer Shares of Qualifying
CREST Shareholders to be admitted to CREST. It is expected that the
Open Offer Shares will be admitted to CREST on 4 May 2020.
Applications through the CREST system may only be made by the
Qualifying CREST Shareholder originally entitled or by a person
entitled by virtue of a bona fide market claim. If you are a
Qualifying CREST Shareholder, no Application Form will be sent to
you but you will receive credits to your appropriate stock account
in CREST in respect of your Open Offer Entitlements. You should
refer to the procedure for application set out in the Circular. The
relevant CREST instruction must have settled by no later than 11.00
a.m. on 30 April 2020.
Action to be taken
Open Offer
Qualifying non-CREST Shareholders wishing to apply for Open
Offer Shares must complete the Application Form in accordance with
the instructions set out in the Circular (Terms and Conditions of
the Open Offer) and on the Application Form and return it with the
appropriate payment to Link Asset Services, Corporate Actions, The
Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, so as to
arrive no later than 11.00 a.m. on 30 April 2020.
If you do not wish to apply for any Open Offer Shares under the
Open Offer, you should not complete or return the Application Form.
If you are a Qualifying CREST Shareholder, no Application Form will
be sent to you. Qualifying CREST Shareholders will have Open Offer
Entitlements and Excess CREST Open Offer Entitlements credited to
their stock accounts in CREST. You should refer to the procedure
for application set out in the Circular (Terms and Conditions of
the Open Offer). The relevant CREST instructions must have settled
in accordance with the instructions in the Circular by no later
than 11.00 a.m. on 30 April 2020.
Qualifying CREST Shareholders who are CREST sponsored members
should refer to their CREST sponsors regarding the action to be
taken in connection with this Announcement, the Circular and the
Open Offer.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record Date for the Open Offer Close of Business on 8 April
2020
Announcement of the Placing and 9 A pril 2020
Open Offer
Publication of Circular and Application 14 April 2020
Form
Ex entitlement date for the Open 8.00 a.m. on 1 5 April
Offer 2020
Open Offer Entitlements and Excess as soon as possible after
CREST Open Offer Entitlements credited 8.00 a.m. on 16 April 2020
to stock accounts of Qualifying
CREST Shareholders
Placing Admission and commencement 8 .00 a.m. on 17 April
of dealings in Placing Shares commence 2020
Recommended latest time for requesting 4.30 p.m. on 24 April 2020
withdrawal of Open Offer Entitlements
and Excess CREST Open Offer Entitlements
from CREST
Latest time for depositing Open 3.00 p.m. on 27 April 2020
Offer Entitlements and Excess CREST
Open Offer Entitlements in to CREST
Latest time and date for splitting 3.00 p.m. on 28 April 2020
of Application Forms (to satisfy
bona fide market claims only)
Latest time and date for receipt 11.00 a.m. on 30 April 2020
of completed Application Forms and
payment in full under the Open Offer
and settlement of relevant CREST
instructions (as appropriate)
Announce result of Open Offer 30 April 2020
Open Offer Admission and commencement 8.00 a.m. on 4 May 2020
of dealings in O pen Offer Shares
commence
CREST members' accounts credited as soon as possible after
in respect of Open Offer Shares 8.00 a.m. on 4 May 2020
in uncertificated form
Dispatch of definitive share certificates 11 May 2020
for the Open Offer Shares in certificates
form
David Bundred, Chairman of Surface Transforms, commented:
"The Fundraising provides the Company with sufficient working
capital to withstand a number of downside scenarios we have
modelled regarding disruptions resulting from COVID-19. The
strengthened balance sheet de-risks the business, and comes at an
exciting time in the Company's development."
"We are pleased that current shareholders continue to support
our strategy to become a series production supplier of carbon
ceramic brake discs to the larger volume OEM automotive
market."
For further information, please contact:
Surface Transforms plc
Kevin Johnson, CEO +44 151 356 2141
Michael Cunningham CFO
David Bundred, Chairman
Cantor Fitzgerald Europe (Nomad & Joint Broker)
David Foreman, Michael Boot, Adam Dawes (Corporate Finance) +44
20 7894 7000
Caspar Shand Kydd, Maisie Atkinson (Sales)
finnCap Ltd (Joint Broker)
Richard Chambers (ECM) +44 20 7220 0500
Ed Frisby, Giles Rolls (Corporate Finance)
David Bundred - PDMR Notification Form
Notification of a Transaction pursuant to Article 19(1) of Regulation
(EU) No. 596/2014
1 Details of the person discharging managerial responsibilities/person
closely associated
-------------------------------------------------------------------------------
a. Name David Bundred
------------------------------------------ -----------------------------------
2 Reason for notification
------------------------------------------ -----------------------------------
a. Position/Status Non-Executive Chairman
------------------------------------------ -----------------------------------
b. Initial notification/ Initial Notification
Amendment
------------------------------------------ -----------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
-------------------------------------------------------------------------------
a. Name Surface Transforms plc
------------------------------------------ -----------------------------------
b. LEI 213800GQHNJPE5O8XO79
------------------------------------------ -----------------------------------
4 Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv) each place where transactions have
been conducted
-------------------------------------------------------------------------------
a. Description of Ordinary Shares of 1p each
the financial
instrument, type GB0002892528
of instrument
Identification
Code
------------------------------------------ -----------------------------------
b. Nature of the Purchase of ordinary shares
transaction
------------------------------------------ -----------------------------------
c. Price(s) and volume(s) Price(s) Volume(s)
------------------------------------------ --------------- --------------
GBP0.13 115,384
----------------------------------------------------------------- --------------
d. Aggregated information
- Aggregated Volume 115,384
- Price GBP 0.13
------------------------------------------ -----------------------------------
e. Date of the transaction 15 April 2020
------------------------------------------ -----------------------------------
f. Place of the transaction AIM
------------------------------------------ -----------------------------------
Richard Gledhill- PDMR Notification Form
Notification of a Transaction pursuant to Article 19(1) of Regulation
(EU) No. 596/2014
1 Details of the person discharging managerial responsibilities/person
closely associated
-------------------------------------------------------------------------------
a. Name Richard Gledhill
------------------------------------------ -----------------------------------
2 Reason for notification
------------------------------------------ -----------------------------------
a. Position/Status Non-Executive Director
------------------------------------------ -----------------------------------
b. Initial notification/ Initial Notification
Amendment
------------------------------------------ -----------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
-------------------------------------------------------------------------------
a. Name Surface Transforms plc
------------------------------------------ -----------------------------------
b. LEI 213800GQHNJPE5O8XO79
------------------------------------------ -----------------------------------
4 Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv) each place where transactions have
been conducted
-------------------------------------------------------------------------------
a. Description of Ordinary Shares of 1p each
the financial
instrument, type GB0002892528
of instrument
Identification
Code
------------------------------------------ -----------------------------------
b. Nature of the Purchase of ordinary shares
transaction
------------------------------------------ -----------------------------------
c. Price(s) and volume(s) Price(s) Volume(s)
------------------------------------------ --------------- --------------
GBP0.13 1,153,846
----------------------------------------------------------------- --------------
d. Aggregated information
- Aggregated Volume 1,153,846
- Price GBP0.13
------------------------------------------ -----------------------------------
e. Date of the transaction 15 April 2020
------------------------------------------ -----------------------------------
f. Place of the transaction AIM
------------------------------------------ -----------------------------------
Kevin D'Silva - PDMR Notification Form
Notification of a Transaction pursuant to Article 19(1) of Regulation
(EU) No. 596/2014
1 Details of the person discharging managerial responsibilities/person
closely associated
-------------------------------------------------------------------------------
a. Name Kevin D'Silva
------------------------------------------ -----------------------------------
2 Reason for notification
------------------------------------------ -----------------------------------
a. Position/Status Non-Executive Director
------------------------------------------ -----------------------------------
b. Initial notification/ Initial Notification
Amendment
------------------------------------------ -----------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
-------------------------------------------------------------------------------
a. Name Surface Transforms plc
------------------------------------------ -----------------------------------
b. LEI 213800GQHNJPE5O8XO79
------------------------------------------ -----------------------------------
4 Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv) each place where transactions have
been conducted
-------------------------------------------------------------------------------
a. Description of Ordinary Shares of 1p each
the financial
instrument, type GB0002892528
of instrument
Identification
Code
------------------------------------------ -----------------------------------
b. Nature of the Purchase of ordinary shares
transaction
------------------------------------------ -----------------------------------
c. Price(s) and volume(s) Price(s) Volume(s)
------------------------------------------ --------------- --------------
GBP0.13 76,923
----------------------------------------------------------------- --------------
d. Aggregated information
- Aggregated Volume 76,923
- Price GBP0.13
------------------------------------------ -----------------------------------
e. Date of the transaction 15 April 2020
------------------------------------------ -----------------------------------
f. Place of the transaction AIM
------------------------------------------ -----------------------------------
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
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April 09, 2020 10:00 ET (14:00 GMT)
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