Electric van-making firm to merge with US arm
Thu, 21 Oct 2010 | MERGER
After fending off a recent takeover approach, manufacturer Tanfield is now expected to sell off the UK arm of its Smiths Electric Vehicles (SEV) division to its US office within the next two months.
There is currently a 60-day exclusivity option for Smith Electric Vehicles US to buy out the UK division, which makes electric vans, for £1 million from Washington-based Tanfield.
Once the sale goes through, it is thought that SEV's UK factory, located in the north east of the country, will keep running. Tanfield will use the funds from the deal to plough back into its core manufacturing business.
The US business announced their intentions to purchase the UK arm of the company only after Tanfield received a rival proposal from Oxford firm Liberty Electric Cars, which proposed to exchange shares with Tanfield and take a majority stake.
Northumberland-based Liberty has since revoked this and, instead of dealing with shares, says it would use Tanfield’s assets to leverage £15 million of debt to help support loss-making Tanfield.
However, Tanfield has rejected Liberty's advances in favour of merging the US and UK arms of the business.
A spokesperson for Tanfield said, “This 60-day exclusivity option underlines the determination and reserve of Smith Electric Vehicles US to see this deal through.
“There are few details of how it would affect the business in the North East, but we expect the outcome to be a positive one,” added the spokesperson.
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