Hardide intends to fundraise gross proceeds of at least £775,000

Hardide plc (LON:HDD), the developer and provider of advanced surface coating technology, has announced its intention to conduct a fundraising to raise gross proceeds of at least £775,000 through (i) a placing to institutional investors of new ordinary shares of 4p each in the capital of the Company by way of an accelerated bookbuild; and (ii) a subscription for new Ordinary Shares by certain directors of the Company and one further individua. The Company has also recently entered into an agreement under the Coronavirus Business Interruption Loan Scheme for a loan of £250,000.The Fundraising will be at a fixed price of 30.9 pence per new Ordinary Share (the “Issue Price“) representing a discount of approximately 5% to the closing mid-market price of an Ordinary Share on 29 January 2021 (being the last business day prior to this announcement).

The Fundraising will be undertaken pursuant to existing authorities of the Company to issue new Ordinary Shares on a non pre-emptive basis, granted at the Company’s annual general meeting held on 17 February 2020.

The Placing is being made available to certain institutional investors but is not available to the public. Hardide has entered into a placing agreement with finnCap Ltd and Allenby Capital Limited who will act as joint bookrunners in relation to the Placing, details of which are set out below.

The Bookbuild will open with immediate effect following release of this announcement. The timing of the closing of the Bookbuild, the number of new Ordinary Shares to be issued pursuant to the Placing, and allocations among subscribers are at the sole discretion of the Company and the Joint Bookrunners. A further announcement confirming the final details of the Placing is expected to be made in due course. The Joint Bookrunners reserve the right to close the Bookbuild without further notice. The Placing is being undertaken on a reasonable endeavours basis and is not being underwritten. The Subscription and the Placing are inter-conditional and there can therefore be no certainty that the Fundraising will complete.

Background to the Fundraising and Use of Proceeds

In the announcement of the Company’s preliminary results for the year ended 30 September 2020 (announced on 7 December 2020) the Board set out a cautious outlook to the current financial year as the uncertainty of COVID-19 continues to impact on its customers’ visibility for their own businesses. This caution was set against a confidence that, as the global economy recovers, volume demand will return and continue on the previous upward trajectory. This belief was supported by market forecasts indicating a good recovery in oil demand and production in the course of 2021.

The Board retains this confidence in the Group’s prospects as the global economy recovers. The Board is however concerned that the timing of, in particular, the recovery in oil demand and production will follow later in 2021 than these forecasts indicated and that market conditions may therefore remain challenging through the first half of the financial year, with revenues impacted as a result.

The Board also previously indicated that the Company would continue to monitor and explore its financing requirements, particularly should the rate of recovery in demand be faster or slower than the directors’ expectations. The Company had a healthy cash balance of approximately £1.60 million and debt of £0.35 million (excluding in each case the new CBILS loan) as at 29 January 2021 but the Board expects the Company to remain cash consumptive for at least the current year.

The Fundraising is therefore being proposed as a prudent measure to increase the Company’s cash reserves to support both expected and any unexpected working capital requirements during this demanding and uncertain period. The Company has a long standing policy of maintaining a level of cash headroom on its balance sheet above forecast requirements such that the Group is resilient through economic cycles and to provide its blue-chip multi-national customers and suppliers with confidence as to Hardide’s financial resources.

The Company has taken various mitigating measures to preserve cash. Hardide also expects in the coming days to draw down on its recently secured CBILS loan of £250,000. This loan is unsecured, does not require the payment of any principal, interest or fees in the first 12 months and has a term of six years. The Company also maintains a disciplined approach to expenditure, has imposed tight controls on its costs as well as having obtained rent holidays/reductions on its properties, and will continue to explore other available sources of external financing if and when considered commercially necessary.

Certain directors of the Company are intending to support the Fundraising by subscribing an aggregate amount of approximately £100,000 for new Ordinary Shares pursuant to the Subscription. In addition, Alison McVicar, a private investor, intends to subscribe for 1,618,123 new Ordinary Shares under the Subscription in an amount of approximately £500,000, which has been facilitated by a short-term and unsecured personal bridging loan made by Robert Goddard, Non-Executive Chairman of the Company.

Further details of the Fundraising

The Fundraising will comprise the issue of at least 566,343 new Ordinary Shares pursuant to the Placing and 1,944,986 Ordinary Shares pursuant to the Subscription. The Subscription is conditional on completion of the Placing and vice-versa.

Pursuant to a placing agreement dated 1 February 2021 between finnCap, Allenby and the Company, finnCap and Allenby have conditionally agreed, as agents on behalf of the Company, to use their reasonable endeavours to procure subscribers for the Placing Shares.

The Fundraising is also conditional upon, inter alia, admission of the Placing Shares and Subscription Shares to trading on AIM becoming effective on or before 8.00 a.m. (London time) on 3 February 2021 or such later date as may be agreed between the Joint Bookrunners and the Company, but in any event no later than 8.00 a.m. (London time) on 17 February 2021, and the Placing Agreement becoming unconditional in all respects (save for Admission) and not having been terminated. The Fundraising Shares will rank equally in all respects with the existing Ordinary Shares.

This announcement should be read in its entirety. In particular, your attention is drawn to the detailed terms and conditions of the Placing and the further information relating to the Bookbuild described in the Appendix to this announcement (which forms part of this announcement).

By choosing to participate in the Bookbuild and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this announcement (including the Appendix) in its entirety, to be making such offer on the terms and subject to the conditions of the Placing contained herein, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

Click to view all articles for the EPIC:
Or click to view the full company profile:
    Share on facebook
    Facebook
    Share on twitter
    Twitter
    Share on linkedin
    LinkedIn
    Hardide Plc

    More articles like this

    Hardide Plc

    Hardide expects recovery in demand to accelerate in H2 2021

    Hardide plc (LON:HDD), at the Annual General Meeting to be held at 11:30am today, Robert Goddard, Chairman of the Company, will make the following statement:  “The Company is in a sound financial position with new proceeds of approximately

    Hardide Plc

    Hardide to hold AGM on 15th March 2021

    Hardide plc (LON:HDD), the developer and provider of advanced surface coating technology, has announced that its Annual Report and Accounts and its notice of Annual General Meeting will be posted to shareholders today. Copies of the notice of AGM

    Hardide Plc

    Emirates: We will operate the A380 till the mid-2030s

    The status of the Airbus A380 has been questioned ever since international travel took a massive step back due to the ongoing COVID-19 outbreak. Some airlines have laid out plans to retire the double-decker prior to the disaster

    Hardide Plc

    Oil prices climb back to pre-pandemic levels

    The price of oil has recovered to its pre-pandemic levels having hit an all-time low last year. While demand for oil is still lower than normal, there are hopes of a speedier than expected economic recovery as vaccines

    Hardide Plc

    Hardide doubles the size of its UK production facility

    Hardide plc (LON:HDD) doubled the size of its UK production facility with a move to a new 20,000 sq. ft. site in Bicester, Oxfordshire completed in September 2020. See the new facility as CEO Philip Kirkham explains the

    Hardide Plc

    Hardide revenues in-line with market expectations

    Hardide plc (LON:HDD), the developer and provider of advanced surface coating technology, has announced its preliminary results for the year ended 30 September 2020. Highlights Financial · Revenue of £4.8m (FY2019: £5.1m) · Gross profit of £2.3m (FY2019: £2.4m)