TIDMTAN
RNS Number : 9849C
Tanfield Group PLC
14 October 2022
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
Tanfield Group Plc
("Tanfield" or the "Company")
Snorkel Investment & Legal Proceeding Update
The Board of Tanfield (the "Board") is pleased to update the
market on its investment in Snorkel International Holdings LLC
("Snorkel"), the aerial work platform business, as well as with
respect to additional loan subscriptions.
Investment Background
-- Tanfield is a 49% shareholder in the equity of Snorkel
following the joint venture between the Company and Xtreme
Manufacturing LLC ("Xtreme") (the "Contemplated Transaction"), a
company owned by Don Ahern of Ahern Rentals Inc, relating to
Snorkel, in October 2013.
-- The Snorkel investment is valued at GBP19.1m. The outcome of
the US and UK Proceedings referenced below could have an impact on
this valuation.
-- On 22 October 2019, the Company announced that it had
received a Summons and Complaint, filed in Nevada (the "US
Proceedings") by subsidiaries of Xtreme, relating to the
Contemplated Transaction.
-- On 24 October 2019, the Company announced it had become
necessary to issue and serve a claim in the English High Court
against Ward Hadaway (the "UK Proceedings"), the solicitor acting
for the Company at the time of the Contemplated Transaction, in
order to fully protect the Company's rights.
-- On 26 February 2021, Ward Hadaway was granted permission to
join Foulston Siefkin, Tanfield's US based law firm who were
retained in 2013 to draft the documents governed by US law relating
to the Contemplated Transaction, into the UK Proceedings. As a
result, the Company amended its claim to include Foulston Siefkin
as a second defendant.
Highlights
-- The Company has agreed to settle its claim against Foulston
Siefkin, the second defendant, in relation to the UK Proceedings on
a no-fault basis for the sum of $4,500,000 including interest and
costs (GBP3,978,903).
-- Whilst the Company is no longer pursuing its claim against
Foulston Siefkin in relation to the UK Proceedings, its claim
against Ward Hadaway, the first defendant, continues with the
3-week trial scheduled to begin on 7 November 2022.
-- The US Proceedings are also continuing, with the jury trial
currently expected to take place around the summer of 2023.
Business Update
Tanfield is a 49% shareholder in the equity of Snorkel following
the joint venture between the Company and Xtreme, a company owned
by Don Ahern of Ahern Rentals Inc, relating to Snorkel, in October
2013 .
Non-Fault Settlement
The Board is pleased to announce that the Company has reached an
agreement to settle its claim against Foulston Siefkin, Tanfield's
US based law firm at the time of the Contemplated Transaction, in
relation to the UK Proceedings, on a no-fault basis for the sum of
$4,500,000 including interest and costs (GBP3,978,903). For the
avoidance of doubt, the agreed settlement should not be construed
as an admission of liability or wrongdoing by Foulston Siefkin.
Save as required under the AIM Rules for Companies, to which the
Company remains subject, the terms of the settlement remain
confidential between the parties.
UK & US Legal Proceedings
Whilst the Company is no longer pursuing its claim against
Foulston Siefkin in relation to the UK Proceedings, its claim
against Ward Hadaway, the solicitor acting for the Company at the
time of the Contemplated Transaction, continues. The 3-week trial
for the UK Proceedings is scheduled to begin on 7 November 2022
.
Further to the update on 24 August 2022, the US Proceedings are
continuing. Whilst there are ongoing deficiencies in the production
of documents by Snorkel / Xtreme, the jury trial is currently still
expected to take place around the summer of 2023.
The Board continues to believe that a positive outcome to either
or both proceedings is possible. So far as it is necessary, the
Company will continue to vigorously defend and advance its position
in both proceedings, whilst continuing to seek advice.
Loan Instruments
As updated on 24 August 2022, the first loan note instrument has
subscriptions totalling GBP625,000, the second loan note instrument
has subscriptions totalling GBP950,000, and the third loan note
instrument has subscriptions totalling GBP1,250,000. All of the
loans are unsecured and carry annual interest of 10% which is to
accrue and is repayable on the earlier of (i) 28 February 2025 or
(ii) receipt of funds relating to either the US or UK Proceedings.
Furthermore, should repayment take place prior to 28 February 2025,
a 20% early redemption premium shall apply.
As a consequence of the above settlement with Foulston Siefkin,
the Board, with guidance from its legal advisors, will be assessing
the level of funds required to complete the UK and US Proceedings.
As required by the loan agreements, any excess funds will be used
to repay a proportion of the loan note instruments.
The Board currently does not believe that further loans will be
necessary to ensure that the Company can continue to protect its
investment in Snorkel.
Further updates will be provided to Shareholders as and when
appropriate.
For further information:
Tanfield Group Plc 020 7220 1666
Daryn Robinson
WH Ireland Limited - Nominated Advisor / Broker
James Joyce / Megan Liddell 020 7220 1666
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END
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