Tanfield faces dilution of 24 per cent stake in electric vehicle arm
Electric vehicle investment firm Tanfield Group is reviewing its investment strategy after news that a fundraising needed by its Smith Electric Vehicles arm could significantly dilute its stake, hitting its shares.
Tanfield, which owns 24% of SEV, said SEV needed more investment to survive and to achieve its aim of listing on the stock market.
Smith, which has consolidated its debt into a $98m debt vehicle, said raising the full investment to achieve a public listing and ongoing working capital could markedly dilute Tanfield's 24% stake in SEV.
Smith is in talks to raise the cash, but Tanfield said: "It is the strong view of the Tanfield board that it is sensible to recognise that there is a risk that Smith will fail to raise the further required investment."
It added: "Until there are definitive terms for any future investment and ultimate valuation of Smith is known, it's not possible for Tanfield to determine its resultant shareholding of Smith in the newly listed entity."
Tanfield said its skylift equipment arm Snorkel International Holdings, in which it has a 49% membership stake, was increasing production to meet rising demand.
It added: "The strategy of the company in relation to its two interests is to return as much possible of the realised value in these investments to shareholders as and when they occur.
"The board is reviewing its investment strategy and will inform shareholders of the outcome of this review in the near future."
Shares in Tanfield fell 4.75p or 26% to 13.5p at 5:29 in London.