This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
Tanfield Group Plc
("Tanfield" or the "Company")
Snorkel Investment & Legal Proceeding Update
The Board of Tanfield (the "Board") is pleased to update the market on its investment in Snorkel International Holdings LLC ("Snorkel"), the aerial work platform business, as well as with respect to additional loan subscriptions.
· Tanfield is a 49% shareholder in the equity of Snorkel following the joint venture between the Company and Xtreme Manufacturing LLC ("Xtreme") (the "Contemplated Transaction"), a company owned by Don Ahern of Ahern Rentals Inc, relating to Snorkel, in October 2013.
· The Snorkel investment is valued at £19.1m. The outcome of the US and UK Proceedings referenced below could have an impact on this valuation.
· On 22 October 2019, the Company announced that it had received a Summons and Complaint, filed in Nevada (the "US Proceedings") by subsidiaries of Xtreme, relating to the Contemplated Transaction.
· On 24 October 2019, the Company announced it had become necessary to issue and serve a claim in the English High Court against Ward Hadaway (the "UK Proceedings"), the solicitor acting for the Company at the time of the Contemplated Transaction, in order to fully protect the Company's rights.
· On 26 February 2021, Ward Hadaway was granted permission to join Foulston Siefkin, Tanfield's US based law firm who were retained in 2013 to draft the documents governed by US law relating to the Contemplated Transaction, into the UK Proceedings. As a result, the Company amended its claim to include Foulston Siefkin as a second defendant.
· The Company has agreed to settle its claim against Foulston Siefkin, the second defendant, in relation to the UK Proceedings on a no-fault basis for the sum of $4,500,000 including interest and costs (£3,978,903).
· Whilst the Company is no longer pursuing its claim against Foulston Siefkin in relation to the UK Proceedings, its claim against Ward Hadaway, the first defendant, continues with the 3-week trial scheduled to begin on 7 November 2022.
· The US Proceedings are also continuing, with the jury trial currently expected to take place around the summer of 2023.
Tanfield is a 49% shareholder in the equity of Snorkel following the joint venture between the Company and Xtreme, a company owned by Don Ahern of Ahern Rentals Inc, relating to Snorkel, in October 2013.
The Board is pleased to announce that the Company has reached an agreement to settle its claim against Foulston Siefkin, Tanfield's US based law firm at the time of the Contemplated Transaction, in relation to the UK Proceedings, on a no-fault basis for the sum of $4,500,000 including interest and costs (£3,978,903). For the avoidance of doubt, the agreed settlement should not be construed as an admission of liability or wrongdoing by Foulston Siefkin. Save as required under the AIM Rules for Companies, to which the Company remains subject, the terms of the settlement remain confidential between the parties.
UK & US Legal Proceedings
Whilst the Company is no longer pursuing its claim against Foulston Siefkin in relation to the UK Proceedings, its claim against Ward Hadaway, the solicitor acting for the Company at the time of the Contemplated Transaction, continues. The 3-week trial for the UK Proceedings is scheduled to begin on 7 November 2022.
Further to the update on 24 August 2022, the US Proceedings are continuing. Whilst there are ongoing deficiencies in the production of documents by Snorkel / Xtreme, the jury trial is currently still expected to take place around the summer of 2023.
The Board continues to believe that a positive outcome to either or both proceedings is possible. So far as it is necessary, the Company will continue to vigorously defend and advance its position in both proceedings, whilst continuing to seek advice.
As updated on 24 August 2022, the first loan note instrument has subscriptions totalling £625,000, the second loan note instrument has subscriptions totalling £950,000, and the third loan note instrument has subscriptions totalling £1,250,000. All of the loans are unsecured and carry annual interest of 10% which is to accrue and is repayable on the earlier of (i) 28 February 2025 or (ii) receipt of funds relating to either the US or UK Proceedings. Furthermore, should repayment take place prior to 28 February 2025, a 20% early redemption premium shall apply.
As a consequence of the above settlement with Foulston Siefkin, the Board, with guidance from its legal advisors, will be assessing the level of funds required to complete the UK and US Proceedings. As required by the loan agreements, any excess funds will be used to repay a proportion of the loan note instruments.
The Board currently does not believe that further loans will be necessary to ensure that the Company can continue to protect its investment in Snorkel.
Further updates will be provided to Shareholders as and when appropriate.
For further information:
Tanfield Group Plc 020 7220 1666
WH Ireland Limited - Nominated Advisor / Broker
James Joyce / Megan Liddell 020 7220 1666