28th Sep 2015 07:47
LONDON (Alliance News) - Investment company Tanfield Group PLC on Monday said Smith Electric Vehicles is at risk of being placed into bankruptcy protection should it fail to raise enough from its fundraising.
Tanfield, which owns a 5.8% stake in Smith Electric Vehicles, said the company has been informed that as Smith was unable to raise sufficient cash in its current funding round, it is now in a difficult financial position.
Smith currently has limited cash on hand to meet its pending obligations and if it does not raise USD4.5 billion on or about October 2, the company is likely to be forced to seek protection under US bankruptcy laws or close down its operations.
Tanfield said it does not intend on taking up its entitlement from Smith's current fundraising push and will make a further announcement once the outcome of the fundraising is known, as it will have a significant dilutive effect on Tanfield's current holding in the company.
Tanfield shares were down 12% early Monday to 16.00 pence per share, one of the worst performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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