08.09.2010

Tanfield issues rights offer

Tanfield owner of Snorkel is to sell 20 million new shares in an open offer to its shareholders in order to raise funds for working capital.

The offer which is 90 percent underwritten by directors and certain institutional investors, prices each share at 10p, a 30 percent discount on yesterday’s closing price. Each shareholder will be able to buy one new share for every 3.7 existing shares they currently own.

The aim is to raise £2 million before costs and directors have already committed to take up their full allotment. While certain directors -Roy Stanley, Darren Kell and Jon Pither- have also agreed to provide a standby loan of up to £750,000 in order to cover any cash shortfalls in the short term.

The principle aim of the offer and the loan is to ensure that the company has sufficient short term working capital to allow completion of the planned electric vehicle consolidation and flotation early next year.

Jerry Wooding, Tanfield’s deputy chairman said: "The Board believes that this fundraising represents the best solution to Tanfield's immediate working capital requirements and the high proportion of underwriting gives us certainty of success of the Open Offer"

"It is imperative that shareholders support this initiative by voting in favour of the resolution at the General Meeting on 30 September 2010, whether or not they are planning to take up their entitlement under the Open Offer."