Snorkel gets cash injection from Smith Electric Vehicles share deal.
By Maria Hadlow24 October 2011
A private share issue at Smith Electric Vehicles has enabled it to pay Tanfield and allowed a $5.6 million cash injection at Snorkel.
Snorkel's parent company, Tanfield has announced that its US associated company Smith Electric Vehicles Corp has raised US$30m in a private placing. This has triggered payment of the consideration it owed to Tanfield, for the purchase of Smith UK at the beginning of this year.
Tanfield has taken $5.6m in cash and $1.99m in a convertible note and warrant. Following the completion of the Placing and Smith obtaining necessary approvals, the note will convert into a new class of preferred equity securities in Smith. This is expected to be finalised in the fourth quarter of 2011 and will result in Tanfield holding 5258814 ordinary shares in Smith representing approximately 27% of the ordinary share capital of Smith.
It is understood that the $5.6 million cash will be used to help remove some of the supply chain bottlenecks at Snorkel that Tanfield reported in its recent financial statements, as it seeks to match production with increased demand