Hardide, an advanced surface coating technology producer, plans to invest in a new UK facility were given a boost after it raised approximately £3.6m through the placing of shares. The company also revealed plans to consolidate shares.
The new facility, a replacement of the existing Bicester facility, would have a 15-year lease expected to be signed in March 2019 and a rent-free period agreed until the end of 2019. The lease and business rates costs of the new facility were estimated at about £240,000 a year.
The existing UK facility was deemed 'too small' to allow for further coating reactors to be installed and was currently working near to full capacity, the company said as it outlined its rationale for the fundraise.
The company issued 234,200,070 shares and 5,799,997 subscription shares at an issue price of 1.5p, a 2% premium to the volume-weighted average price of a share during the period from 9 December 2018 to 7 February 2019, which was the last business day immediately prior to this announcement.
The company would also use the proceeds to invest in three further coating reactors of differing capacities and dimensions, with each reactor expected to have an approximate order lead-time of 12 months.
'It is intended that a reactor of the same size as those currently employed at the group's existing UK facility will be ordered and installed first,' the company said. 'The reactors at the current site will then be moved sequentially so as to avoid a fall in production capacity during migration to the proposed new site. This migration is expected to be complete by September 2020.'
The company also gave assessment of performance, with sales growing 42% year-on-year to a record £4.61m, for the year ended 30 September 2018.
In a bid to reduce share price volatility, Hardide said it would to put a share consolidation plan to a shareholder vote.
The plan proposes to reduce every 40 shares in issue into a single share with a nominal value of 4 pence.
The proportion of shares owned by each shareholder, immediately before and immediately after the share capital consolidation, would remain unchanged. At 10:24am: (LON:HDD) Hardide PLC share price was -0.15p at 1.6p