REG - Tanfield Group PLC - Snorkel Investment & Legal Proceeding Update

TanfieldAnnouncement

14/10/2022 13:30

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RNS Number : 9849C  Tanfield Group PLC  14 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 on its
investment in Snorkel International Holdings LLC ("Snorkel"), the aerial work
platform business, as well as with respect to additional loan subscriptions.

 

 

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.

 

·    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.

 

 

Highlights

 

·    The Company has agreed to settle its claim against Foulston Siefkin,
the second defendant, in relation to the UK Proceedings on a no-fault basis
for the sum of $4,500,000 including interest and costs (£3,978,903).

 

·    Whilst the Company is no longer pursuing its claim against Foulston
Siefkin in relation to the UK Proceedings, its claim against Ward Hadaway, the
first defendant, continues with the 3-week trial scheduled to begin on 7
November 2022.

 

·    The US Proceedings are also continuing, with the jury trial 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

 

The Board is pleased to announce that the Company has reached an agreement to
settle its claim against Foulston Siefkin, Tanfield's US based law firm at the
time of the Contemplated Transaction, in relation to the UK Proceedings, on a
no-fault basis for the sum of $4,500,000 including interest and costs
(£3,978,903).  For the avoidance of doubt, the agreed settlement should not
be construed as an admission of liability or wrongdoing by Foulston Siefkin.
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

 

Whilst the Company is no longer pursuing its claim against Foulston Siefkin in
relation to the UK Proceedings, its claim against Ward Hadaway, the solicitor
acting for the Company at the time of the Contemplated Transaction,
continues.  The 3-week trial for the UK Proceedings is scheduled to begin on
7 November 2022.

 

Further to the update on 24 August 2022, the US Proceedings are continuing.
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 either or both
proceedings is possible.  So far as it is necessary, the Company will
continue to vigorously defend and advance its position in both proceedings,
whilst continuing to seek advice.

 

Loan Instruments

 

As updated on 24 August 2022, the first loan note instrument has subscriptions
totalling £625,000, the second loan note instrument has subscriptions
totalling £950,000, and the third loan note instrument has subscriptions
totalling £1,250,000.  All of the loans are unsecured and carry 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.  Furthermore, should repayment take place prior to 28 February
2025, a 20% early redemption premium shall apply.

 

As a consequence of the above settlement with Foulston Siefkin, the Board,
with guidance from its legal advisors, will be assessing the level of funds
required to complete the UK and US Proceedings.  As required by the loan
agreements, any excess funds will be used to repay a proportion of the loan
note instruments.

 

The Board currently does not believe that further loans will be necessary 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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