Brakes specialist boosts working capital with £20m share issue

David Bundred

Knowsley brakes specialist Surface Transforms has raised £18m through the placing of new shares.

Net proceeds are expected to be £17m.

The firm, which manufacturers brake systems for high performance cars and aircraft, issued 35,750,000 placing shares and 250,000 subscription shares at the issue price of 50p per ordinary share, representing around 23.2% of the company’s existing ordinary shares.

The issue price represents a discount of approximately 17% to the closing mid-market price of 60.5p on January 19.

In addition to this, the company intends to provide all qualifying shareholders with the opportunity to subscribe for up to four million open offer shares to raise around £2m, before expenses.

The company will use the proceeds as working capital to fund a range of ongoing works with various partners (OEMs) on future developments.

It said its prospective contract pipeline has the potential to utilise the entire production capacity of its Knowsley site by 2024.

Chairman David Bundred subscribed for 50,000 shares in the initial offer, taking his total shares to 1,360,025, and non-executive director Richard Gledhill subscribed for 200,000 new shares, taking his total to 15,013,346 shares.

Mr Bundred said: “We are delighted with the success of this placing which now enables us to proceed with building OEM (original equipment manufacturer) production cell two and thus removing this impediment in winning target business with OEM 8 and OEM 9.

“In addition, it is most encouraging to welcome a number of new institutional investors, as well as receiving significant ongoing support from our existing institutional shareholders.”

He added: “We are also pleased to be announcing the open offer, again demonstrating our determination that our smaller, early stage, retail investors should continue to have the opportunity to participate in the increasing success of the company as we mature.”