TIDMTAN
RNS Number : 2714D
Tanfield Group PLC
18 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 regarding the Company's ongoing legal proceedings in
relation to its investment in Snorkel International Holdings LLC
("Snorkel"), the aerial work platform business.
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.
-- On 14 October 2022, the Company announced that it had agreed
to settle its claim against Foulston Siefkin in relation to the UK
Proceedings on a no-fault basis for the sum of $4.5m (GBP4.0m).
Highlights
-- The Company has agreed to settle its claim against Ward
Hadaway in relation to the UK Proceedings on a no-fault basis for
the sum of GBP2.9m including interest and costs.
-- This brings an end to the UK Proceedings and, once the agreed
Court Order is approved, the 3-week trial scheduled to begin on 7
November 2022 will be vacated.
-- The Company will now focus entirely on the US Proceedings,
which are continuing and the jury trial is 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
Following the announcement on 14 October 2022, in which the
Company announced that it had agreed to settle its claim against
Foulston Siefkin in relation to the UK Proceedings on a no-fault
basis for the sum of $4.5m (GBP4.0m), the Board is pleased to
announce that the Company has now also reached an agreement to
settle its claim against Ward Hadaway, the solicitor acting for the
Company at the time of the Contemplated Transaction, on a no-fault
basis for the sum of GBP2.9m including interest and costs. For the
avoidance of doubt, the agreed settlement should not be construed
as an admission of liability or wrongdoing by Ward Hadaway. 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
As a result of reaching no-fault settlements with both parties
in relation to the UK Proceedings, amounting to GBP6.9m
collectively, the 3-week trial scheduled to begin on 7 November
2022 will now be vacated, bringing an end to the UK Proceedings
.
As reported in the Company's 2021 Report and Financial
Statements, GBP1.25m of cash is held on deposit with the English
Court as security in relation to the UK Proceedings. As a result of
reaching no-fault settlements with both parties, bringing an end to
the UK Proceedings, the GBP1.25m of security will also be released
and returned to the Company.
As updated on 14 October 2022, the US Proceedings are continuing
and the Company will now focus entirely on those proceedings.
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 the US
Proceedings is possible. So far as it is necessary, the Company
will continue to vigorously defend its position, whilst continuing
to seek advice.
Use of Funds
As updated on 14 October 2022, following the no-fault settlement
with Foulston Siefkin, any excess funds would be used to repay a
proportion of the Company's loan note instruments. As a consequence
of the further above settlement with Ward Hadaway, the Company will
now, as required by the loan agreements, seek to fully repay its
GBP2.825m of loans, plus accrued interest and early redemption
premiums. The remaining funds will be used to provide ongoing
working capital funding, including costs related to the US
Proceedings.
The Board believes that it has the necessary funding 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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