Hardide plc, a UK-based surface engineering technology provider, has decided to fast track its plans to penetrate the aerospace sector in order to take advantage of significant new market conditions and blue chip customer opportunities.

The move has been prompted by the new EU REACH environmental legislation on chemicals, which has driven many manufacturers to source alternative coating technologies to replace hard chrome. In addition, Hardide has been pursuing alternative coating studies and/or test programs with customers such as Messier-Dowty. Such programs have resulted in the company deciding to accelerate its five-year plan to grow its market share within the aerospace industry. Hardide is currently 18 months into the plan which has, to date, included success in securing approved supplier status with BAE Systems. The new timescale will compact the programme to complete within the next year and a half, and will include securing further industry approvals and registrations.

Hardide’s accelerated growth in the aerospace sector will be funded by raising up to £1 million of debt; the first £500,000 of which is through a two year fixed term loan from an existing shareholder, the Boyce Group, who constitute a related party under the AIM Rules. The loan is to take the form of an assignable company debenture; will have an interest rate of base plus two percent; attracts no penalty for early repayment; and will be repayable on demand on a change of control of the Company. The deal also includes the option for the Boyce Group to subscribe for £500,000 worth of shares at 12p per share, exercisable for a period of up to three years from 21 August 2007. The directors, having consulted with Seymour Pierce, the Company’s nominated adviser, consider the terms to be fair and reasonable insofar as shareholders are concerned. The Company will make an announcement regarding the balance of up to a further £500,000 of debt in due course.

The additional working capital provided by the loan will support the creation of an aerospace business unit by funding a dedicated team of engineering, technical and quality specialists as well as IT, measuring, metrology and tooling equipment for the unit.

The company reportedly has parts in test with five of the largest global aircraft manufacturers and systems designers and is in application-specific discussions with a further ten.

Jim Murray-Smith, Chief Executive of Hardide plc, said: “Over the last 18 months, the prospect of the new REACH regulations has prompted many manufacturers to replace hard chrome with alternative technologies, a number of which are not meeting the required standards. Subsequent discussions with potential customers have concluded that Hardide offers a very attractive possible alternative if we can fast track our development program. We therefore have decided to leverage significantly more resource into the company so that we are able to capitalize on these ripe conditions.

For more information, visitwww.hardide.com.