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Tanfield falls as US partner makes US$10mln fundraising effort

Even if the fundraising is successful, Tanfield’s stake will be significantly diluted, the company said.
Tanfield falls as US partner makes US$10mln fundraising effort
The electric vehicle group's shares plummeted this morning

Electric vehicle group Tanfield (LON:TAN) was dealt another blow today as it emerged that its US partner is facing bankruptcy.

Tanfield owns a 5.8% stake in Smiths Electric Vehicles, which is in the process of fundraising up to US$10mln.

First closing will take place on Thursday, with a minimum of US$4.5mln needed to be raised and there is a real concern it may struggle to reach that amount.

If Smith does not raise sufficient cash, it will be in a “difficult financial position” and may be forced to seek bankruptcy protection or close down its operations, said Tanfield.

Tanfield’s investment of £4.8mln in Smith Electric, is in the books at around 3.3p per share and if the US firm were to go bust, its net asset value (NAV) would drop to 24.2p from 27.5p.

Even if the fundraising is successful, Tanfield’s stake will be significantly diluted, the company said.

The offer is open to shareholders, but Tanfield has said it will not take part.

Smith Electric will also appoint Peter Christenson, Christofer Mowry and John Micek III to the board at the time of the first closing.

Shares in Tanfield dropped 15% to 15.5p today.

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