REG - Tanfield Group PLC - Announcement regarding Smith Electric Vehicles <Origin Href="QuoteRef">TAN.L</Origin>

TanfieldAnnouncement

28/09/2015 07:02

RNS Number : 3185A
Tanfield Group PLC
28 September 2015
Tanfield Group PLC
("Tanfield")
Announcement regarding Smith Electric Vehicles
The Board of Tanfield was yesterday informed by the Board of Smith Electric Vehicles ("Smith") subscription rights offering of up to $10m to be conducted over the next thirty (30) days. The terms of this offering shall include provision for a First Closing on or about Thursday, October 2nd in the minimum amount of $4.5m. Each shareholder will have the opportunity to participate in their pro rata amount.
The Board of Tanfield was informed that as a result of Smith not raising sufficient cash through its current funding round that it is in a difficult financial position. It has limited cash on hand to meet pending obligations. If the Board of Smith fails to raise $4.5m on or about October 2nd then the company is likely to be forced to seek protection under US bankruptcy laws or close down its operations.
The Board of Smith also authorised the appointment of three (3) new members to the Board of Directors. The intent would be for these new Directors to join the Smith Board at the time of the First Closing. These individuals are Peter Christenson, Christofer Mowry and John Micek III.
The Board of Tanfield does not propose to take up its entitlement in the fundraising. A further announcement will be made when the outcome of the fund raising is known but if successful, it would have a significant dilutive effect upon the value of the current Smith holding.
As reported in its interim results for the period to 30 June 2015 as announced on 27 July 2015, the current book value of Smith in the Tanfield Balance Sheet was 4.8m (equating to approximately 3.3p per share) against Total Assets of 41.4m (Net Assets of 39.6m equating to approximately 27.5p per share). If Smiths value is written down to zero the Net Asset value of Tanfield would be approximately 24.2p per share.
Contacts:
Tanfield Group Plc
Roy Stanley
0845 155 7755
WH Ireland Limited - Nominated Adviser
James Joyce / James Bavister
0207 220 1666
Peterhouse Corporate Finance Limited - Broker
Duncan Vasey / Peter Greensmith
0207 220 9797

This information is provided by RNS
The company news service from the London Stock Exchange
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