REG - Surface Transforms - Conclusion of £13.2m Loan agreement

Surface TransformsAnnouncement

11/12/2023 11:45

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RNS Number : 3635W  Surface Transforms PLC  11 December 2023

11 December 2023

 

Surface Transforms plc

("Surface Transforms" or "the Company")

 

Conclusion of £13.2m Loan agreement

 

Surface Transforms plc (AIM:SCE) manufacturer of carbon fibre reinforced
ceramic automotive brake discs is pleased to announce that it has signed a
£13.2m loan agreement with the Liverpool City Region Urban Development Fund
which is part funded by the European Regional Development Fund (ERDF). The
loan will contribute to the Company's forthcoming £44m investment programme.

 

The investment is supporting capital expenditure that will see the production
capacity available in the Knowsley site rise from £50m sales capacity per
year in 2024 to £150m sales capacity per year in 2027. The capacity increase
is required to support the forecast substantial sales increase underpinned
 by the Company's current £390m* lifetime contract value and £300m
prospective contract pipeline. The remainder of the £44m capital investment
programme will be funded from free cash flow as the Company moves into profit,
still expected during 2024.

 

The terms of the loan remain unchanged from those outlined during the
fundraising. The loan facility is available for drawdown over an initial
two-year period and will be progressively deployed exclusively for capital
expenditure purposes. Quarterly capital repayments will commence in the first
quarter following the completion of the availability period. Completion of
this loan agreement was a condition precedent to the second phase of the
recent equity placing. This condition has now been satisfied. The passing of
the necessary resolutions is expected at the forthcoming General Meeting on
Monday 18 December 2023.

 

Kevin Johnson CEO said: "We are delighted to have secured this capital
expenditure loan, that will enable us to execute our strategic growth plans
and further strengthen our position as a leader in carbon fibre reinforced
ceramic automotive brake discs. We want to thank our partners in the Liverpool
City Region Combined Authority and Knowsley District Council for their support
in securing this loan. We are now looking forward to concluding the recent
equity placing and Open Offer and accelerating our programme of increased
capacity installation paving the way for a swift acceleration of our expansion
plans."

*This is based on the directors' expectations, their understanding of the
relevant OEMs production plans and estimated demand for discs  and it takes
into account the expected lifetime revenue

For enquiries, please contact:

 Surface Transforms plc                                           +44 151 356 2141
 David Bundred, Chairman
 Kevin Johnson CEO

 Isabelle Maddock CFO

 Zeus (Nominated Adviser and Joint Broker)                        +44 203 829 5000
 David Foreman / Dan Bate / James Edis (Investment Banking)
 Dominic King (Corporate Broking)

 Cavendish Capital Markets Ltd (Joint Broker)                     +44 20 7220 0500
 Ed Frisby / Abigail Kelly (Corporate Finance)

 Andrew Burdis / Harriet Ward  (ECM)

About Surface Transforms

Surface Transforms plc. (AIM:SCE) develops and produces carbon‐ceramic
material automotive brake discs. The Company is the UK's only manufacturer
of carbon‐ceramic brake discs, and only one of two mainstream carbon ceramic
brake disc companies in the world, serving customers that include major OEMs
in the global automotive markets.

The Company utilises its proprietary next generation Carbon Ceramic Technology
to create lightweight brake discs for high‐performance road and track
applications for both internal combustion engine cars and electric vehicles.
While competitor carbon‐ceramic brake discs use discontinuous chopped carbon
fibre, Surface Transforms interweaves continuous carbon fibre to form a 3D
matrix, producing a stronger and more durable product with improved heat
conductivity compared to competitor products; this reduces the brake system
operating temperature, resulting in lighter and longer life components with
superior brake performance. These benefits are in addition to the benefits of
all carbon‐ceramic brake discs vs. iron brake discs: weight savings of up to
70%, longer product life, consistent performance, reduced brake pad dust and
corrosion free.

The Company holds the London Stock Exchange's Green Economy Mark.

For additional information please visit www.surfacetransforms.com
(http://www.surfacetransforms.com)

 

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