20.03.2013

Tanfield issues more shares

Tanfield, owner of Snorkel aerial lifts has placed 10.5 million new shares with institutional investors raising £2.1 million.

The placing is conditionally and the £2.1 million is the gross amount raised from the placing with institutional investors at a price of 20 pence per Share, 1.27 percent above yesterday’s closing.

The net proceeds will be used for general working capital purposes, which the company says will allow it to respond to market opportunities during the 2013 buying season.

7,247,826 of the shares will be issued under existing authorities, while the other 3,252,174 shares that make up the offer are conditional on the passing of a new Resolution on April 15th. The placing has not been underwritten.

Tanfield says that it plans to announce its preliminary results for 2012 in April and expects to report total revenues for the year of £45 million, with an operating loss of approximately £15.5million.

The move follows the announcement that it is in ongoing discussions regarding the potential sale of Snorkel and as part of that process it has instigated a formal review for a potential sale.

Vertikal Comment

Well this is a surprise, not that the company is to issue new equity to raise funds - it has consistently chosen this method over taking on normal debt and it has served it well helping it through the recession- no the surprise is that it is able to place more shares given its results and the fact that it has upset the ‘city’ in the past.

It says a great deal about the persuasive powers of the the top team at Tanfield and their salesmanship – at least when it comes to selling the corporate story and its shares.

Clearly the success on this placing is based on the assumption that Tanfield will sell Snorkel, and sell it for a good deal more than 20p a share. Interesting times – Bauma opens on April 15th and an industry buyer would want to announce a deal at the show – so watch this space.