Last checked at 16 May 2016 16:31
Tanfield Group PLC
("Tanfield" or the "Company")
Smith Electric Vehicles Update
The Board of Tanfield was today informed by the Board of Smith Electric Vehicles, in which Tanfield holds approximately 5.76 per cent of the share capital, that it has filed a complaint against Five Dragons Group Electric Vehicles Limited ("FDG") and Orng EV Solutions, Inc. ("Prevok") in the Court of Chancery in Delaware.
The Board of Smith state that in general, the suit is based on fraudulent misstatements that were given that induced Smith to enter into the joint venture with FDG and to enter into other commercial transactions with FDG and its affiliates. Smith's complaint also asserts breaches of contract and breaches of fiduciary duty in FDG's exercise of control over the joint venture. Smith is asking the Court to declare the joint venture terminated or rescinded, in either event, returning to Smith its exclusive right to sell its vehicles in the United States. Smith also seeks damages for the financial injury that the defendants' unlawful conduct has inflicted on Smith's business. Smith believe that their decision to sue was necessary and will free them up to move beyond months of paralysis, focus on raising the capital necessary to restart the business and to realize its potential in the US and throughout the rest of the world.
The Board of Tanfield was also informed that Smith urgently need funding and are proposing to seek to raise a Series F financing.. At this stage no further details have been provided in relation to the proposed fundraise and a further announcement will be made when the outcome of the fundraise is known.
As reported in the interim results for the period to 30 June 2015, the current book value of Smith in the Tanfield Balance Sheet was £4.8m (equating to approximately 3.1p per share) against Total Assets of £41.4m (Net Assets of £39.6m equating to approximately 25.8p per share). As reported on 17 February 2016, the Board of Tanfield are reviewing the position of the investment in Smith and its carrying value and will update shareholders within the 2015 preliminary results next month, or before should the review complete earlier. Tanfield cautions that there is no certainty that Smith will be successful in its intention to raise the further funding it requires.
For further information:
Tanfield Group Plc
Daryn Robinson 0700 349 7489
WH Ireland Limited - Nominated Advisor
James Joyce / Nick Prowting 020 7220 1666
Peterhouse Corporate Finance - Broker
Peter Greensmith / Duncan Vasey 020 7220 9797