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")

Loan Note Instrument

The Board of Tanfield (the "Board") is pleased to update the market with respect to additional loans put in place to fund the Company's ongoing legal proceedings in relation to its investment in Snorkel International Holdings LLC ("Snorkel"), the aerial work platform business, as well as general working capital.

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 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 pending the outcome of the US Proceedings.  

·    On 26 February 2021, Ward Hadaway were 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.

Loan Subscription

Further to the update on 3 March 2022, in which the Company announced that the first loan note instrument (the "First Loan") of up to £700,000 had subscriptions totalling £625,000, and the second loan note instrument (the "Second Loan") of up to £1m had subscriptions totalling £950,000, the Board is pleased to announce that the Company has put in place a third loan note instrument (the "Third Loan") of up to £2m.  The Third Loan will be used for providing ongoing funding for the US and UK Proceedings, as well as general working capital. 

The Third Loan is unsecured and carries 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.  Should repayment take place prior to 28 February 2025, a 20% early redemption premium shall apply.

A number of existing shareholders have subscribed to the Third Loan and have collectively committed to subscribe to an initial sum of £950,000, which constitutes a related party transaction under Rule 13 of the AIM Rules as a result of OTK Holding A/S and Zoar Invest Aps, which each hold approximately 14% of the issued shares of the Company, subscribing £500,000 and £200,000 respectively to the Third Loan.  The Directors of the Company, having consulted with WH Ireland Limited, the Company's nominated adviser, consider the terms of the transaction to be fair and reasonable in so far as shareholders are concerned.

The Board believe that further subscriptions to the Third Loan may be necessary to ensure that the Company continues to protect its investment in Snorkel.  Following discussions with the existing shareholders, if further subscriptions were required, the Board are of the opinion that further funding will be made available.

The Board believes that a positive outcome to either or both of the US and UK Proceedings is a reasonable expectation, and the Company will continue to vigorously defend and advance its position in both proceedings, whilst continuing to seek advice. 

Further updates will be provided 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 / Megan Liddell                                                         020 7220 1666