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Tanfield share price hit after stock flotation abandoned
SHARES in Washington, Wearside firm Tanfield crashed by about 40 per cent after its electric car associate Smith Electric Vehicles announced it was abandoning plans for a stock market flotation in the US.
Tanfield owns 24 per cent of Smith, following the sale last year of its vehicle business to its US partner. This left Tanfield to concentrate on its remaining division, which makes cherry pickers. Smith, based in Kansas City, planned to offer shares in a flotation on the Nasdaq, with Tanfield selling part of its stake.
But now Smith has withdrawn its application, with its chief executive Bryan Hansel saying: "We received significant interest from potential investors. However we were unable to complete a transaction at a valuation or size that would be in the best interests of our company and its existing shareholders. We have instead decided to pursue private financing opportunities to support the execution of our business plan."
Tanfield's shares rallied by about 4 per cent in late trading yesterday. In July, the manufacturer, which employs about 230 people in the North-East, raised £2m in a placing which it passed on to Smith as a short-term bridging loan.
This was due to be repaid once Smith's initial public offering was completed. Further details are expected to emerge when Tanfield issues its interim results on Friday.