Last checked at 3 Apr 2020 07:00
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain
Tanfield Group Plc
("Tanfield" or the "Company")
Snorkel Investment Update
The Board of Tanfield (the "Board") is pleased to update the market in relation to the legal proceedings brought against the Company by its 51% joint venture partner SKL Holdings LLC ("SKL") and Snorkel International Holdings LLC ("Snorkel") and can confirm that the Motion for Summary Judgement (the "Motion") filed by SKL and Snorkel has been denied.
Investment Background
· Tanfield is a 49% shareholder in the equity of Snorkel following the joint venture between the Company and SKL, a newly formed subsidiary of Xtreme Manufacturing LLC ("Xtreme"), a company owned by Don Ahern of Ahern Rentals Inc, in which the Company contributed the substantial assets and value of its aerial work platform division to Snorkel in October 2013.
· The Snorkel investment is valued at £19.1m. The outcome of the US Proceedings referenced below could have an impact on this valuation.
· In November 2018 the Company announced it had received a call option notice over its interest in Snorkel, alleging that Snorkel can acquire Tanfield's 49% interest for $0 (nil) and that payment of the priority amount and preferred return (collectively the "Preferred Interest"), which on 30 September 2018 amounted to approximately $25m, is not required, which the Board rejected as being invalid.
· On 22 October 2019, the Company announced that it had received a Summons and Complaint, filed in Nevada (the "US Proceedings"), relating to the purported call option notice.
Snorkel Investment Update
On 30 March 2020, the Company announced that despite ongoing attempts to resolve the dispute amicably, Snorkel and SKL filed the Motion in favour of their claims and against claims brought by Tanfield, without a trial, claiming that there were no genuine issues of material fact. The Board vehemently disagreed with the Motion and believed that it was without merit and subsequently opposed the Motion at a hearing held on 25 March 2020.
Following the hearing on 25 March 2020, the judge took the Motion under advisement. On 1 April 2020, after a review and consideration of the record, the court determined that, after reviewing the contract there appears to be genuine issues of material fact pertaining to the contract, its terms, and its execution and therefore denied the Motion brought by Snorkel and SKL. As a result of the Motion being denied, the US Proceedings will continue to progress, and the parties will now proceed in discovery.
Following the Loan of up to £700,000, as announced on 30 March 2020, the Board continue to seek advice in order to vigorously defend its position and will provide further updates to the market as and when appropriate.
For further information:
Tanfield Group Plc 020 7220 1666
Daryn Robinson
WH Ireland Limited - Nominated Advisor / Broker
James Joyce / Lydia Zychowska 020 7220 1666