Snorkel Investment Update

RNS Number : 3723N

Tanfield Group PLC

19 May 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")

Snorkel Investment Update

The Board of Tanfield (the "Board") is updating the market on its investment in Snorkel International Holdings LLC ("Snorkel").

Investment Background

· 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 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 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.

· 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 solicitor acting for the Company in 2013 (the "UK Proceedings"). 

Business Update

On 12 November 2019, the Board provided an update on the Snorkel management account information for the 9 months ending 30 September 2019 which, among other things, saw Snorkel sales for the 9-month period increase to $169.5m from $152.7m for the same period in 2018.  The Company has not yet received the Snorkel management account information for the quarter ending 31 December 2019 (Snorkel's financial year end) or the quarter ending 31 March 2020 and therefore the Board is unable to provide a further update on Snorkel at this time.  The Board remains hopeful that the information will soon be made available by Snorkel but adds that the Company reserves its rights under the contractual agreements should it be necessary to pursue the provision of such information through legal means .

On 30 March 2020, we reported that the Company had filed an application for a stay in the UK Proceedings, pending the outcome of the US Proceedings.  That application has been refused and the UK Proceedings will continue to progress with a trial scheduled to take place between July 2021 and October 2021.  As a result of the UK Proceedings continuing to progress, the Board is reassessing the Company's longer-term funding requirements, in addition to the £500,000 loan note currently subscribed to, as announced on 30 March 2020, and expects to provide further updates to the market over the next few months.

The US Proceedings continue to progress as outlined in the update on 3 April 2020.  The Board continues to seek advice throughout and 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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