REG - Tanfield Group PLC - Loan Note Instrument

TanfieldAnnouncement

24/05/2022 07:00

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RNS Number : 5023M  Tanfield Group PLC  24 May 2022

The information contained within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulation (EU) No.
596/2014. Upon the publication of this announcement via a Regulatory
Information Service ("RIS"), this inside information is now considered to be
in the public domain

 

 

Tanfield Group Plc

("Tanfield" or the "Company")

 

Loan Note Instrument

 

 

The Board of Tanfield (the "Board") is pleased to update the market with
respect to additional loans put in place to fund the Company's ongoing legal
proceedings in relation to its investment in Snorkel International Holdings
LLC ("Snorkel"), the aerial work platform business, as well as general
working capital.

 

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 £19.1m.  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
pending the outcome of the US Proceedings.

 

·    On 26 February 2021, Ward Hadaway were 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.

 

 

Loan Subscription

 

Further to the update on 3 March 2022, in which the Company announced that the
first loan note instrument (the "First Loan") of up to £700,000 had
subscriptions totalling £625,000, and the second loan note instrument (the
"Second Loan") of up to £1m had subscriptions totalling £950,000, the Board
is pleased to announce that the Company has put in place a third loan note
instrument (the "Third Loan") of up to £2m.  The Third Loan will be used for
providing ongoing funding for the US and UK Proceedings, as well as general
working capital.

 

The Third Loan is unsecured and carries 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.  Should repayment take
place prior to 28 February 2025, a 20% early redemption premium shall apply.

 

A number of existing shareholders have subscribed to the Third Loan and have
collectively committed to subscribe to an initial sum of £950,000, which
constitutes a related party transaction under Rule 13 of the AIM Rules as a
result of OTK Holding A/S and Zoar Invest Aps, which each hold approximately
14% of the issued shares of the Company, subscribing £500,000 and £200,000
respectively to the Third Loan.  The Directors of the Company, having
consulted with WH Ireland Limited, the Company's nominated adviser, consider
the terms of the transaction to be fair and reasonable in so far as
shareholders are concerned.

 

The Board believe that further subscriptions to the Third Loan may be
necessary to ensure that the Company continues to protect its investment in
Snorkel.  Following discussions with the existing shareholders, if further
subscriptions were required, the Board are of the opinion that further funding
will be made available.

 

The Board believes that a positive outcome to either or both of the US and UK
Proceedings is a reasonable expectation, and the Company will continue to
vigorously defend and advance its position in both proceedings, whilst
continuing to seek advice.

 

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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