# Surface Transforms Proposed Placing and Subscription to raise approximately £6.5 million

- Link: https://www.directorstalkinterviews.com/surface-transforms-proposed-placing-and-subscription-to-raise-approximately-6-5-million/4121154596
- Published: 2024-05-01T17:37:00+01:00
- Author: Amilia Stone

**[Surface Transforms](https://www.directorstalkinterviews.com/company/surface-transforms-plc/sce.l)
plc** ([LON:SCE](https://www.directorstalkinterviews.com/company/surface-transforms-plc/sce.l)),
manufacturers of carbon fibre reinforced ceramic automotive brake discs, has announced
that it proposes to raise approximately £0.8 million (before expenses) by means 
of a Firm Placing and Subscription, and a further £5.7 million (before expenses)
by means of a Conditional Placing, with a total 650,000,000 New Ordinary Shares 
at 1 pence per New Ordinary Share. In addition to the Placing and Subscription, 
the Company proposes to raise up to a further £2.0 million (before expenses), subject
to the Board’s discretion to increase the size of the Open Offer, by way of an Open
Offer.

The net proceeds from the Placing and Subscription will be used for immediate working
capital requirements, both in terms of existing operations, but also the Phase 2
and manufacturing scale-up. Any excess raised pursuant to the Open Offer will provide
additional working capital headroom.

The Placing will be conducted by way of an accelerated bookbuild which will be launched
immediately following this Announcement, in accordance with the terms and conditions
set out in the Appendix to this Announcement.

The Firm Placing will be effected by way of a cashbox placing of new Ordinary Shares
for non-cash consideration, further details of which are set out below. The cashbox
placing structure is being used due to the Issue Price being at a substantial discount,
which would otherwise limit the net proceeds receivable by the Company given the
existing allotment authorities available to the Board for issuing Ordinary Shares
on a non-pre-emptive basis.

**KEY HIGHLIGHTS**

·      Proposed Placing of approximately £6.3 million (before expenses) with institutional
investors, proposed Subscription of £0.2 million by the Directors (before expenses)
and certain PDMRs and proposed Open Offer of up to £2.0 million (before expenses),
subject to the Board’s discretion to increase the size of the Open Offer, to existing
Qualifying Shareholders, in each case at the Issue Price.

·      The Company intends to use the net proceeds of the proposed Fundraise for
working capital requirements and to support existing operations and the manufacturing
scale-up

·      The Issue Price represents a discount of approximately 66 per cent. to the
closing mid-market price of 2.9 pence per Ordinary Share on 30 April 2024, being
the last Business Day prior to the date of this Announcement. 

·      Zeus is acting as Nominated Adviser and Joint Broker to the Company and Cavendish
is acting as Joint Broker to the Company in connection with the Fundraise.

·      Completion of the Conditional Placing is subject to, _inter alia_, the Resolutions
being passed at a General Meeting of the Company, expected to be held at 11.00 a.
m. on 23 May 2024.

The timing for the close of the Bookbuild and allocation of the Placing Shares shall
be at the absolute discretion of the Joint Brokers, in consultation with the Company.
The allocation of the Placing Shares between First Admission and Second Admission
shall be at the absolute discretion of the Joint Brokers, in consultation with the
Company. The final number of Placing Shares to be issued pursuant to the Placing
will be agreed by the Joint Brokers and the Company at the close of the Bookbuild.
The result of the Placing will be announced as soon as practicable thereafter. The
Placing is not underwritten.

In addition, the Directors and certain PDMRs have indicated an intention to participate
in the Fundraising (by way of a direct Subscription for Subscription Shares) as 
follows:

| **_Director_** | **_Intended Subscription_** | **_Number of Subscription Shares_** | 
| Matthew Taylor | £100,000 | 10,000,000 | 
| David Bundred | £25,000 | 2,500,000 | 
| Kevin Johnson | £25,000 | 2,500,000 | 
| Ian Cleminson | £25,000 | 2,500,000 | 
| Julia Woodhouse | £25,000 | 2,500,000 | 
| Isabelle Maddock | £3,500 | 350,000 | 
| Stephen Easton^(1) | £15,000 | 1,500,000 |

_^(1)Stephen Easton is the non-Board Chief Operating Officer and a PDMR of the Company_

In addition to the Placing and Subscription, the Company intends to provide all 
Qualifying Shareholders with the opportunity to subscribe for an aggregate of 200,000,000
Open Offer Shares at the Issue Price of 1 pence per Open Offer Share to raise up
to approximately £2.0 million (before expenses), subject to the Board’s discretion
to increase the size of the Open Offer. Qualifying Shareholders subscribing for 
their full entitlement under the Open Offer may also request additional Open Offer
Shares through an excess application facility. The Open Offer is not underwritten.

The issue of the Firm Placing Shares and the Subscription Shares are conditional,
_inter alia¸_ on the Firm Placing Admission. The issue of the Conditional Placing
Shares and the Open Offer Shares are conditional, _inter alia_, the passing by Shareholders
of the Resolutions at the General Meeting of the Company, expected to be held at
11.00 a.m. on 23 May 2024. 

Shareholders should note that the Conditional Placing and Open Offer are conditional,
inter alia, on the passing of the Resolutions. Failure to approve the Resolutions
would therefore prevent the Company from raising funds pursuant to the Conditional
Placing and Open Offer, and only part of the net proceeds would be received by the
Company. This would require the Company to seek urgent alternate financing that 
may or may not be available and, if available, may or may not be on worse terms 
than the Fundraising. The Directors believe that the Resolutions to be proposed 
at the General Meeting are in the best interests of the Company and Shareholders
as a whole and unanimously recommend that Shareholders vote in favour of the Resolutions.

A circular containing further details of the Placing, the Subscription and the Open
Offer, Notice of General Meeting, proxy form and Application Form will be despatched
to Shareholders following announcement of the result of the Placing and Subscription
and will thereafter be available on the Company’s website at www.surfacetransforms.
com.

Applications will be made to the London Stock Exchange for the admission of the 
Firm and Conditional Placing Shares, Subscription Shares and Open Offer Shares to
be admitted to trading on AIM.  Admission of the Firm Placing Shares and the Subscription
Shares is expected to commence at 8.00 a.m. on 7 May 2024 and admission of the Conditional
Placing at 8.00 am on 24 May 2024 and the Open Offer Shares at 8.00 am on 28 May
2024.

The New Ordinary Shares, when issued, will be fully paid and will rank pari passu
in all respects with the Existing Ordinary Shares.

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