Business
Sale of Business Assets of Sm
Sale of Business Assets of Sm.
About this update from Tanfield Group Plc
[{"type":"text","content":"\n RNS Number : 5666Y Tanfield Group PLC 23 December 2010 \n \n\n23rd December 2010\nTANFIELD GROUP PLC\n (\"Tanfield\" or the \"Company\")\nSale of Business Assets of Smith Electric Vehicles UK\n· Sale of Smith Electric Vehicles' assets to US associate - $15m consideration for certain business assets\n· Tanfield retains 49% of equity in enlarged entity immediately following transaction\n· Possible future US public offering (\"IPO\") of consolidated entity\nAs set out in previous announcements earlier this year, and specifically in the announcement on 9 August 2010 regarding the signing of Heads of Terms with its associate company Smith Electric Vehicles US (\"SEVUS\"), the Board of Tanfield is pleased to announce that it has today signed a contract to dispose of the business and assets (excluding debtors and cash), of the Company's wholly owned division, Smith Electric Vehicles (\"SEV\") to SEVUS (the \"Transaction\"). \nThe Transaction and the transfer of ownership of SEV will be effective on January 1st 2011 (\"Completion\").\nThe board of Tanfield believes that a consolidation of the SEV entity into its associate company, SEVUS, creating a single, larger US based business, would be in the best interests of shareholdersand that the structure of the Transaction will give the consolidated business the best chance of achieving its short and long term strategic objectives.\nTanfield will receive US$15,000,000 (\"Consideration\") in respect of the business and certain assets of SEV. The Consideration will be split into 20 payments, payable monthly, with the first such payment being made on Completion. Interest will accrue on the principal outstanding amount at the rate of 4% over base rate.\nIn the event that SEVUS completes further interim fundraises then Tanfield has the option to receive lump sum payments to reduce the Consideration and create a payment holiday for SEVUS. In the event of an IPO of SEVUS, the full balance of the Consideration would immediately fall due. \nSEV reported losses of £2,159k for the 6 months to 30 June 2010 and net assets at that date of £9,607k.\nImmediately following the Transaction, Tanfield will retain a 49 per cent. holding in the enlarged SEVUS business. As previously advised, Tanfield understands that...