14th Mar 2014 09:58
LONDON (Alliance News) - Investing company Tanfield Group PLC Friday said its two passive investments, Snorkel International Holdings and Smith Electric Vehicles Corp, performed well during 2013, as it sold its loss-making engineering business in December.
Tanfield said Snorkel, a manufacturer of self-propelled aerial work platforms, has been boosted by an injection of working capital. Production at the division is increasing, and the business is taking advantage of the general uplift in the market for its products.
Buyer and supplier relationships also have been strengthened at Snorkel, and Tanfield said it has been informed that orders and revenue are both rising. Tanfield has a 49% stake in Snorkel.
In addition, Smith Electric Vehicles, which manufactures and markets zero-emission commercial electric vehicles, is pursuing further investment as it follows its strategy of listing on a public market.
Tanfield said it has been informed that the ability of Smith to achieve its strategy is dependent upon the continued financial support of its existing investors, which Smith has said it has.
"It is the strong view of the Tanfield board that it is sensible to recognise that there is a risk that Smith will fail to raise the further required investment," the company said.
Tanfield said Smith has consolidated various accumulated debt instruments, including a further USD7.6 million since end of June 2013, into a convertible instrument. The full value of this instrument post full conversion is USD98 million.
"It has been indicated by the Smith management that if the full investment is raised to achieve a public listing and ongoing working capital then the terms of the prospective investment and fund raising and the conversion of the debt would be markedly dilutive to Tanfield's current holding of 24%," the company added.
Until there are definitive terms for any future investment and ultimate valuation of Smith is known, then it isn't possible for Tanfield to determine its resultant shareholding of Smith in the newly listed entity.
At the end of 2013, Tanfield found a buyer for its loss-making engineering business, Tanfield Engineering Services Ltd. The company initially called in administrators for the business unit, after failing to attract buyers. However it was later sold to Tinsely Special Projects Ltd for an undisclosed fee.
The stock was trading at 16.36 pence, down 1.89 pence or 10%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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