Tanfield Group could raise a further £2m for legal battles at home and in the US in which it is vying to keep control of its stake in cherry picker firm Snorkel.
The group told the London Stock Exchange it had issued a new loan note of up to £2m that had attracted subscriptions of £950,000, including £700,000 from its investors OTK Holding A/S and Zoar Invest Aps.
Lenders will see 10% interest which is repayable either once Tanfield is successful in its US and 海角视频 legal cases relating to its £19.1m stake in Washington-based Snorkel, or by the end of February 2025.
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Tanfield has already raised up to £1.57m through previous loan notes and this latest borrowing comes as the firm warned of delays to legal proceedings and said a US trial window would now begin in February 2023, while its 海角视频 legal case progresses towards trial in November.
The dispute surrounds a staged acquisition deal in 2013, in which Tanfield sold a 51% stake in loss-making Snorkel to Xtreme Manufacturing LLC, in order to save it.
Before trial, expert accountancy evidence will be prepared to value Snorkel at the time of Tanfield and Xtreme's deal which included performance-related terms that would allow Tanfield to sell its remaining shares to Xtreme.
However, Xtreme claims these targets were not hit and it now has the right to acquire Tanfield’s 49% stake in Snorkel for free.
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In January, Tanfield announced that it had amended its claim in the 海角视频 proceedings to include US law firm Foulston Siefkin as a second defendant in addition to Newcastle law firm, Ward Hadaway.
An update from Tanfield said: "The board believe that further subscriptions to the third loan may be necessary to ensure that the company continues to protect its investment in Snorkel.
"Following discussions with the existing shareholders, if further subscriptions were required, the board are of the opinion that further funding will be made available."
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