Member Article

Smith developments is positive news for Tanfield

The Board of North East-based investment group Tanfield has updated the market regarding its investment in Smith Electric Vehicles (“Smith”).

Smith is a leading producer of all-electric medium-duty commercial vehicles and yesterday announced that it has executed a conditional agreement to form an exclusive joint venture (“the JV”) with strategic partner and investor FDG Electric Vehicles Limited (“FDG”).

FDG is an international company listed on the Hong Kong Stock Exchange and is a vertically integrated electric vehicle manufacturer engaged in the R&D, production and distribution of all-electric vehicles.

Smith will hold 20 million shares out of a total of 42.5 million. This represents a holding of 47% for Smith. Smith will distribute all the shares in the New Joint Venture to its common stockholders on a pro rata basis. The agreement is conditional on certain conditions precedent including , inter-alia, necessary government approvals and FDG due diligence.

Under the terms of the JV agreement Smith Electric will distribute all the shares in the New Joint Venture to its common stockholders on a pro rata basis, of which Tanfield currently hold 5.76%.

Based on the current valuation of the New Joint Venture that has been agreed between the Joint Venture parties in contributing their respective assets, the Board of Tanfield believes, subject to the Joint Venture agreement completing, that this will represent approximately $2.3m of value to Tanfield while still retaining its existing 5.76% holding in Smith Electric which is currently valued at $10.7m.

It is understood from Smith that it still intends to pursue a listing on a US stock exchange as previously announced. Further details will be made available as they are known.

The New Joint Venture intends to raise an additional $20m in cash with the current Smith common stockholders having a first right of refusal to participate on a pro rata basis. As more details are known, the Board will consider Tanfield’s position.