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

TanfieldAnnouncement

18/10/2022 11:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221018:nRSR2714Da&default-theme=true

RNS Number : 2714D  Tanfield Group PLC  18 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 regarding
the Company's ongoing legal proceedings in relation to its investment in
Snorkel International Holdings LLC ("Snorkel"), the aerial work platform
business.

 

 

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.

 

·    On 14 October 2022, the Company announced that it had agreed to
settle its claim against Foulston Siefkin in relation to the UK Proceedings on
a no-fault basis for the sum of $4.5m (£4.0m).

 

 

Highlights

 

·    The Company has agreed to settle its claim against Ward Hadaway in
relation to the UK Proceedings on a no-fault basis for the sum of £2.9m
including interest and costs.

 

·    This brings an end to the UK Proceedings and, once the agreed Court
Order is approved, the 3-week trial scheduled to begin on 7 November 2022 will
be vacated.

 

·    The Company will now focus entirely on the US Proceedings, which are
continuing and the jury trial is 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

 

Following the announcement on 14 October 2022, in which the Company announced
that it had agreed to settle its claim against Foulston Siefkin in relation to
the UK Proceedings on a no-fault basis for the sum of $4.5m (£4.0m), the
Board is pleased to announce that the Company has now also reached an
agreement to settle its claim against Ward Hadaway, the solicitor acting for
the Company at the time of the Contemplated Transaction, on a no-fault basis
for the sum of £2.9m including interest and costs.  For the avoidance of
doubt, the agreed settlement should not be construed as an admission of
liability or wrongdoing by Ward Hadaway.  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

 

As a result of reaching no-fault settlements with both parties in relation to
the UK Proceedings, amounting to £6.9m collectively, the 3-week trial
scheduled to begin on 7 November 2022 will now be vacated, bringing an end to
the UK Proceedings.

 

As reported in the Company's 2021 Report and Financial Statements, £1.25m of
cash is held on deposit with the English Court as security in relation to the
UK Proceedings.  As a result of reaching no-fault settlements with both
parties, bringing an end to the UK Proceedings, the £1.25m of security will
also be released and returned to the Company.

 

As updated on 14 October 2022, the US Proceedings are continuing and the
Company will now focus entirely on those proceedings.  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 the US Proceedings
is possible.  So far as it is necessary, the Company will continue to
vigorously defend its position, whilst continuing to seek advice.

 

Use of Funds

 

As updated on 14 October 2022, following the no-fault settlement with Foulston
Siefkin, any excess funds would be used to repay a proportion of the Company's
loan note instruments.  As a consequence of the further above settlement with
Ward Hadaway, the Company will now, as required by the loan agreements, seek
to fully repay its £2.825m of loans, plus accrued interest and early
redemption premiums.  The remaining funds will be used to provide ongoing
working capital funding, including costs related to the US Proceedings.

 

The Board believes that it has the necessary funding 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

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDBKFBQCBDKOKD