REG - Tanfield Group PLC - Smith Investment Update <Origin Href="QuoteRef">TAN.L</Origin>

TanfieldAnnouncement

17/11/2014 08:21

RNS Number : 1448X
Tanfield Group PLC
17 November 2014
Tanfield Group PLC
Smith Investment update
The Board of Tanfield is pleased to update the market on the progress that its investee company Smith Electric Vehicles US has made towards its goal of a public listing on a US exchange. 
 Holding in Smith:Post the conversion of debt Tanfield now holds 5.76% of the equity of Smith (excluding warrants).
 Value of holding:The value is just under $10.73 million (6.9 million) which represents 5p per share. (Tanfield's other investment, Snorkel, has an estimated value per share of 26p as set out the Company's interim accounts resulting in a combined estimate of value from investments of 31p per share). 
 Warrants: On the closing of the series E funding round the first tranche of Tanfield warrants have become due with an exercise price of $0.31c. The warrants will be exercisable within 6 months of issuance and carry a term of 2 years. In aggregate the total number of warrants to be issued to Tanfield are expected to amount to just over 2% of the issued share capital at the time of the OTCBB listing.
Update:
1. Conversion of Debt to Equity: Smith has closed the Series E round and converted all investment debt to equity.
2. Progress to OTCBB listing: The Board of Smith has decided that a completed audit up to the end of 2014 would be more reflective of the business in its first filings as a merged public company. This audit is expected to be completed in January 2015 and it is anticipated that the completion of the merger with ABSR and filing of the Super 8k (filed 4 days from merger and a requirement to create tradable shares) will follow shortly thereafter.
3. Capital Raise: The Board of Smith anticipates raising additional capital of $20 million to facilitate the ongoing production cost down activities and the plan to restart production in January.
4. Operational update: The Board of Smith have indicated that operational progress has been made including an evolving positive relationship with FDG ( formerly Sinopoly), the Hong Kong listed Electric Vehicle Manufacturer and advances in marketing and business development. 
(The Board of Smith have committed to issuing shareholders with a fuller operational update in the near future. The Tanfield Board will make a further announcement on this together with an update on its other investment when it is received.) 
Comment
The Tanfield Board takes the view that although all the signs are very positive and the fact that significant debt holders have now converted their debt to equity, thus sharing the risk with all other shareholders; there still remains an element of risk that the Smith Board will not succeed in its plan or achieve the indicative timescale. It considers that it has sought to fulfil its obligation to its shareholders in seeking to optimise the value on its investment in Smith. The Board will endeavour to return value to shareholders as soon as practically possible.
Contacts:
Tanfield Group Plc
Roy Stanley  0845 155 7755
WH Ireland Limited
James Joyce / James Bavister 0207 220 1666

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