Sale of Business Assets of Sm

RNS Number : 5666Y

Tanfield Group PLC

23 December 2010

 



23rd December 2010

TANFIELD GROUP PLC

 ("Tanfield" or the "Company")

Sale of Business Assets of Smith Electric Vehicles UK

·     Sale of Smith Electric Vehicles' assets to US associate - $15m consideration for certain business assets

·     Tanfield retains 49% of equity in enlarged entity immediately following transaction

·     Possible future US public offering ("IPO") of consolidated entity

As set out in previous announcements earlier this year, and specifically in the announcement on 9 August 2010 regarding the signing of Heads of Terms with its associate company Smith Electric Vehicles US ("SEVUS"), the Board of Tanfield is pleased to announce that it has today signed a contract to dispose of the business and assets (excluding debtors and cash), of the Company's wholly owned division, Smith Electric Vehicles ("SEV") to SEVUS (the "Transaction").

The Transaction and the transfer of ownership of SEV will be effective on January 1st 2011 ("Completion").

The board of Tanfield believes that a consolidation of the SEV entity into its associate company, SEVUS, creating a single, larger US based business, would be in the best interests of shareholdersand that the structure of the Transaction will give the consolidated business the best chance of achieving its short and long term strategic objectives.

Tanfield will receive US$15,000,000 ("Consideration") in respect of the business and certain assets of SEV. The Consideration will be split into 20 payments, payable monthly, with the first such payment being made on Completion.  Interest will accrue on the principal outstanding amount at the rate of 4% over base rate.

In the event that SEVUS completes further interim fundraises then Tanfield has the option to receive lump sum payments to reduce the Consideration and create a payment holiday for SEVUS. In the event of an IPO of SEVUS, the full balance of the Consideration would immediately fall due.

SEV reported losses of £2,159k for the 6 months to 30 June 2010 and net assets at that date of £9,607k.

Immediately following the Transaction, Tanfield will retain a 49 per cent. holding in the enlarged SEVUS business.  As previously advised, Tanfield understands that SEVUS's plans include a possible public offering of its equity securities on the US NASDAQ exchange. 

The Consideration from the Transaction will be used by Tanfield in its core Powered Access division, as it continues its strategy of preparing this business for the anticipated market recovery.

The Independent Directors of Tanfield (being those Directors who are not also Directors of SEVUS) consider, having consulted with its nominated adviser, that the terms of the Transaction are fair and reasonable insofar as its shareholders are concerned.

Darren Kell, Chief Executive of Tanfield commented

"The board of Tanfield believes that a consolidation of the Smith Electric Vehicles UK entity into our associate company, SEVUS, creating a single, larger US based business, would be in the best interests of shareholders, particularly in light of the plans that SEVUS management have for the combined business post this transaction."

Further information:

Tanfield Group plc                                                           0845 155 7755

Darren Kell / Charles Brooks

Arbuthnot Securities Limited (NOMAD and Broker)         020 7012 2000

James Steel / Edward Gay

ENDS

 

END

 

 

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