Hardide plc Raises £2.54 million to invest in new reactors in the US

Hardide Plc

Hardide plc (LON:HDD), the provider of advanced surface coating technology, is pleased to announce that the Company has conditionally raised a total of £2.54 million (before expenses) via an oversubscribed fundraising (the “Fundraising”) at a price of 1.7 pence per new ordinary shares of 0.1p each (“Ordinary Shares”).

The Fundraising will enable the Company to make a number of capital investments in order to create capacity to take advantage of the demand expected by management.

The Fundraising is taking place pursuant to existing authorities established at the Company’s last Annual General Meeting on 20 February 2017 and comprises two tranches, being (i) the “Initial Fundraising” of the Placing and the Initial Subscription (each as defined below) to raise a total of £1.72 million subject to customary conditions including admission to trading on AIM of the relevant new Ordinary Shares becoming effective, and (ii) the “Deferred Fundraising” to raise £0.82 million, subject principally to the Company having, within a period of five months, received advance assurance from HM Revenue & Customs (“HMRC”) that this additional sum will be eligible for EIS and/or VCT tax relief (the “Tax Clearance”) as well as other customary conditions.

Further information on the Fundraising, including its conditionality, is set out below.

Highlights

· The Fundraising comprises the Initial Fundraising to raise £1.72 million and the Deferred Fundraising to raise £0.82 million, all at a price of 1.7 pence per new Ordinary Share;

· Net proceeds of the Fundraising of approximately £2.45 million will be used primarily to:

o fund two additional reactors at the Company’s US facility;
o enhance existing equipment at UK and US sites;
o increase sales and marketing resource; and
o strengthen the Company’s balance sheet.

· Management’s expectation of future new business in US justifies additional capacity;

· Benefits from first additional reactor expected in FY19;

· Framework supply agreement signed with a major North American international operator in the oil and gas sector;

· Indications received from Martinsville-Henry County Economic Development Corporation (“MCEDC”) that it intends to advance a US$240,000 loan in support of Hardide’s expansion plans for its Martinsville facility;

· Financial results for the year ended 30 September 2017 expected to be in line with the Board’s expectations and with a cash balance of £1.21m as at that date; and

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· Hardide expects to release its results for the year ended 30 September 2017 on 11 December 2017.

Philip Kirkham, Chief Executive Officer of Hardide Plc commented: “We are delighted to have received such strong support from investors for this Fundraising. The new funding will principally allow us to invest in up to two new reactors in the US which will, when deployed, create the capacity required at the Company’s existing facilities to accommodate projected new business. We are very mindful of ensuring that funds are deployed in a prudent manner to match our expectations of forthcoming demand. The loan we expect from MCEDC will further evidence support for the Company’s growth plans for the Martinsville facility and we thank them for the support Hardide has received since opening the facility in 2016.

“We are excited by the recent progress made regarding two new commercial agreements, one being a signed framework agreement with a major international operator in the oil and gas sector. The Company is also in the final stages of discussion with a well-known manufacturer of drilling and production tools. These agreements underpin existing market forecasts and the Board’s belief in the Company’s further growth.”

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