Tanfield Group (LON:TAN), the company that makes aerial work platforms and commercial electric vehicles, said this morning that talks over doing some sort of deal for its US associate company Smith Electric Vehicles were continuing. In March, Tanfield received a £37m cash offer for the subsidiary from Smith Electric Vehicles US (SEVUS). It has now extended the exclusivity period connected with those talks by another 60 days.

Tanfield said it was in active discussions with SEVUS over various options aimed at optimising shareholder value for its electric vehicle interests. It said it was seeing strong interest in the electric vehicle concept within the US, with recent events and developments there further highlighting the demand for these products and a company in this business sector. Underlining this point, and the increasing US federal commitment to low emission vehicles, the SEVUS facility yesterday hosted a visit by President Obama. However, Tanfield insisted that there could be no assurance that any agreement would be reached with SEVUS or that SEVUS would be able to complete any financing required.

Tanfield endured a sales slump of 60% to £58m last year as the effects of the economic downturn continued to impact on the group. Pre-tax losses were cut by 74% to £22.4m, helped by a 42% reduction in staff costs following an aggressive restructuring programme. The group’s problems were two-fold during the year, with no improvement in the significant depression in global demand for aerial work platforms and muted sales of electric commercial vehicles, caused by lack of credit. In Powered Access, sales tumbled to £42m from £114m in 2008, while sales in the Zero Emission Vehicles business slumped to £15m from £25m. Nevertheless, towards the end of the year, there were signs of improvement in the Zero Emission Vehicles division and this business has continued to improve in early 2010. It has not been so good for the Powered Access division, however, where there is little or no expectation of improvement until 2011 at the earliest.

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