Tanfield Regulatory News (TAN)

6 Feb 2009 07:00



Tanfield Group PLC

06 February 2009

 Tanfield Group plc ("Tanfield"; "the Group"; or "the Company")

Heads of Terms Regarding the Production of Electric Vehicles in North America

Commenting, Darren Kell, CEO of The Tanfield Group Plc, said: ""North America represents potentially the largest single market for our commercial electric vehicles. The establishment of Smith Electric Vehicles US Corporation will provide Tanfield with a fast, efficient and economically prudent route to market.

"The additional volumes which are anticipated to be generated by SEV US Corp will further strengthen the supply chain, while offering additional cost savings via shared procurement and shared supplier development."

For further information:

The Tanfield Group Plc, the leading manufacturer of aerial work platforms and commercial electric vehicles, is pleased to announce the incorporation of Smith Electric Vehicles US Corporation (SEV US Corp).

Tanfield has signed Heads of Terms regarding the establishment of SEV US Corp, the funding of SEV US Corp, the licence of intellectual property rights to SEV US Corp, and the provision by Tanfield of support services. 

SEV US Corp will be a privately-owned company, in which Tanfield shall following the placing of new shares in SEV US Corp described below have a 49% stake. 

Tanfield shall licence to SEV US Corp the North American intellectual property rights relating to the production of its Smith product range. SEV Corp will pay a per-vehicle royalty fee to Tanfield based on the sales price of each commercial vehicle with an initial advance of £1m. Tanfield retains responsibility for design capability and intellectual property development. Furthermore, SEV US Corp can draw on Tanfield for various services and support functions, for a fee to be agreed. 

The Heads of Terms anticipates a total fund raising of $10m, which will be achieved through the issue of new shares in SEV US Corp to investors and through the availability of State funding. Tanfield shall retain a 49% interest in SEV US Corp. Closing of the transaction is conditional upon: i.) funding; ii.) agreement over the terms of the IPR licence, Services Agreement and Shareholder Rights Agreement for SEV US Corp. 

SEV US Corp has received firm expressions from two States, of funding support for a production facility. It will announce a final location for this facility shortly.

As a 51% American-owned business, SEV US Corp qualifies to apply for the substantial Federal and regional funding currently available for electric vehicle manufacturers in the USA.

The company is in discussions with a number of customers within the North American market.

SEV US Corp intends to commence production of the Smith Newton truck for sale in North America during 2009, with further zero emission product lines to follow in the truck, van and light van sectors. The Smith Newton is based on the Avia truck chassis and is available in configurations from 7,500kg to 12,000kg gross vehicle weight, or 15,500lbs to 25,000lbs, which equate to US Class 5 and 6 medium duty trucks.

Tanfield expects that SEV US Corp will produce a moderate number of Newton trucks in 2009, for sale as seed vehicles into targeted major fleet operators. 

The Board of SEV US Corp will comprise five executive members, including two Tanfield Board members; Geoff Allison, Managing Director of the Zero Emission Vehicles Division and Dr John Bridge, Non-Executive Director. 

The CEO of SEV US Corp will be Bryan Hansel, previously CEO of evo Medical Solutions, a medical devices manufacturer based in Des Moines, Iowa. Bryan has a track record of bringing new technologies to market in North America, across industries including healthcare, technology and transportation.

The remaining two Board members will be Bruce Shalett, Managing Partner of Lincoln Woods Capital Management and one additional member to be named by SEV US over the coming weeks.

ENDS