Tanfield Group PLC Loan Note Instrument and Snorkel Investment Update (9561H)
30 Mars 2020 - 8:00AM
UK Regulatory
TIDMTAN
RNS Number : 9561H
Tanfield Group PLC
30 March 2020
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")
Loan Note Instrument and Snorkel Investment Update
The Board of Tanfield (the "Board") is pleased to announce that
the Company has put in place a loan note instrument (the "Loan") of
up to GBP700,000. The Loan will be used to provide funding for the
ongoing legal proceedings relating to its interest in Snorkel
International Holdings LLC ("Snorkel") and other day to day
costs.
The Loan is unsecured, carries annual interest of 10% which is
to accrue and is repayable on the earlier of (i) 28 February 2025
or (ii) receipt of sufficient funds relating to either the legal
proceedings brought against the Company by its 51% joint venture
partner SKL Holdings LLC ("SKL") and Snorkel (the "US Proceedings")
or the proceedings against Ward Hadaway as reported on 24 October
2019 (the "UK Proceedings").
Several existing shareholders have subscribed to the Loan and
have collectively committed to provide a minimum of GBP500,000. The
Loan constitutes a related party transaction under Rule 13 of the
AIM Rules as a result of OTK Holding A/S and Zoar Invest Aps, which
each hold approximately 14% of the issued shares of the Company,
both subscribing GBP180,000 to the Loan. The Directors of the
Company, having consulted with WH Ireland Limited, the Company's
nominated adviser, consider the terms of the transaction to be fair
and reasonable.
Snorkel Investment Update
The Board is updating the market regarding the US Proceedings
and the UK Proceedings.
As reported on 22 October 2019, Snorkel and SKL filed a Summons
and Complaint in the District Court, Clark County, Nevada where
they allege that, pursuant to their issuing a call option, they can
acquire Tanfield's 49% interest in Snorkel 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. The Board disagrees with this
position and is continuing to take advice and the necessary steps
to vigorously defend its position including answering the Complaint
and asserting counterclaims against Snorkel and SKL.
Despite ongoing attempts to resolve the dispute amicably, and
before the parties had any opportunity to conduct discovery, on 29
January 2020, Snorkel and SKL filed a Motion for Summary Judgment
(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 disagree with the Motion and are of the
opinion that it is without merit and subsequently opposed the
Motion at a hearing held on 25 March 2020. The Board notes that it
is Snorkel and SKL that are trying to take Tanfield's 49% interest
for $0 (nil) consideration, despite Tanfield having contributed the
substantial assets and value of its aerial work platform division
to Snorkel in 2013. This was done in good faith based on the terms
of the contemplated transaction as described in the Circular,
issued in accordance with AIM Rules, which was a requirement of the
agreement that was subsequently entered into following the
necessary shareholder approval. Following the hearing on 25 March
2020, the judge took the Motion under advisement and we await a
ruling to be issued.
On 12 October 2019, we reported that it had not been possible to
agree amicably a stay of the UK Proceedings ("Stay") with Ward
Hadaway and, if that situation persisted, it was the intention of
the Board to apply to the court for a Stay. To date, it has still
not been possible to agree an amicable Stay with Ward Hadaway and
therefore the Company has filed an application for a Stay, pending
the outcome of the US Proceedings, with the court. It is expected
that the outcome of the application for a Stay will be known by the
end of May, subject to any delay due to COVID-19.
The Board will provide further updates 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 / Lydia Zychowska 020 7220 1666
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END
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