Surface Transforms aims for new listing

Surface Transforms has issued its prospectus for its move from OFEX to the Alternative Investment Market of the London Stock Exchange.

Surface Transforms has issued its prospectus for its move from OFEX to the Alternative Investment Market of the London Stock Exchange.

It is seeking to raise up to GBP 2.5 million through the issue of up to 2,777,778 new ordinary shares at a price of 90p per share.

Assuming full subscription, market capitalisation on its admission to AIM would be GBP 9.6 million.

Investors are invited to subscribe for a minimum of 1000 shares (GBP 900).

Copies of the prospectus can be obtained from Brewin Dolphin Securities, 34 Lisbon Street, Leeds LS1 4LX (tel: +44 113 2410 128).

The offer for subscription will close at 5:00pm on 13th September 2002 (or such later time, as may be notified by the company).

It is expected that the first day of dealing in the new ordinary shares will commence on 17th September 2002.

Existing shareholders, who were on the shareholder register of the company at the close of business on 23rd August 2002, will be given priority under the offer in the event that it is oversubscribed.

The company has placed GBP 815,000 with financial institutions.

Brewin Dolphin has agreed to subscribe to up to GBP 200,000 in additional shares under the offer in the event and to the extent that subscriptions under the placing and offer have been received for less than GBP 1.215 million.

A further GBP 200,000 has also been guaranteed by a separate company investor, but will not be taken up if the offer receives sufficient valid applications from retail investors.

Commenting on the move to AIM, Julio Faria, Managing Director, said: "We have been developing our new generation products in dynamic market sectors with some of the biggest companies.

The move to AIM represents an exciting development for Surface Transforms.

We're extremely confident that the company can become a significant player in the supply of carbon ceramic materials".

The money raised from the flotation will be primarily used to support further sales, increase production capabilities to meet expected sales growth, recruit new staff and for working capital purposes.

Increased working capital will enable Surface Transforms to put its materials into more development programmes via its aircraft, car and rail partners.

Surface Transforms manufactures carbon-fibre-reinforced ceramics (CFRCs), a new generation of materials made by transforming carbon-carbon into different ceramics that enhance the properties of the base material.

CFRCs have great advantages over rival ferrous-based products.

For example, carbon ceramic brakes are up to 70% lighter than existing metal products, which means improved braking performance, superior fuel economy and reduced emissions.

Raising GBP 850,000 when it was admitted to OFEX in December 2000, Surface Transforms has made significant progress in a number of important market sectors.

Most recently, in August 2002, it signed an agreement to supply plant and material to a leading aerospace braking equipment supplier.

The plant will be used to manufacture brake discs for large aircraft, with the company receiving royalties from the manufacturing.

If the plant is successful this could lead to a licensing agreement for the manufacture of brake discs for a commercial aircraft programme.

Surface Transforms has invested a proportion of the OFEX float proceeds in a capital expenditure programme.

It has increased its plant capacity by adding a new processing module, and also purchased a full-scale brake test dynamometer, which has removed the company's reliance on external testing agencies, and consequently considerably reduced the lead time for testing new materials.

The company has continued to develop new products in conjunction with leading Formula 1 teams.

At the start of this Formula 1 season, the company reported that it now has a commercially viable F1 product.

Currently, a number of leading F1 teams are testing and evaluating its brakes and discs.

Also since floating on OFEX, Surface Transforms has been developing its brake products for the high performance and prestige car market.

In December 2001 it reported to shareholders a successful 1000-mile European road test.

Surface Transforms is also continuing to make progress with its partners in developing products for high-speed rail applications.

In October 2001 the company entered a new market for the supply of materials and parts for a rocket propulsion system to a major aerospace company.

Successful tests have been completed confirming the materials potential and the company is now manufacturing parts for a test programme.

Surface Transforms is led by a highly skilled and experienced management team with an operational track record in carbon materials technology.

The Board of Directors comprises Derek Whitney (nonexecutive Chairman, who was previously General Manager of ICI Saffil and more recently Vice President of Borden Chemical Inc), Julio Faria (Managing Director, who worked in engineering and commercial positions for ICI over a 12-year career), David Levis (Commercial Director, former manager at KPMG Corporate Finance), Geoff Gould (Sales and Marketing Director who was primarily a Commercial Manager at Honeywell Aerospace responsible for sales to the Formula 1 and GT Motorsport sectors), David Clark (nonexecutive Scientific Director, a former Director of ICI's New Science Group and before that Professor of Chemistry at the University of Durham), and David Williams (nonexecutive who is currently Operations Manager for the Jordan Formula 1 Grand Prix Racing Team).

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