For details on how to contact our editorial and commercial departments, click here
Shareholders urged to back rescue plan
10:38am Tuesday 1st October 2013 in Business News
A NORTH-EAST vehicle manufacturer urged shareholders to back a rescue plan for its loss-making cherry-picker division after it posted worsening results.
Last month, Tanfield Group agreed a deal with a US construction equipment magnate to take control of its troubled Snorkel division.
It comes as Tanfield saw second quarter revenue drop to £18.9m, compared to £21m in the same period last year.
There were also net losses of £8.4m, compared to £8.2m in the second quarter of 2012.
Recovery in the industrial equipment industry means that global market opportunities for Snorkel remain strong, the company said, however it requires investment to fund a turnaround plan.
The company has agreed a deal for Snorkel with USbased Xtreme Manufacturing, which goes to a shareholder vote on Monday. It is hoped the sale will save Snorkel’s 100- strong North-East workforce.
Chief executive Darren Kell said: “The board is strongly recommending the recently-announced proposed disposal of the Powered Access division, which de-risks the Tanfield group, protecting the value inherent within the Snorkel business as well as the holding in Smith Electric Vehicle Corporation.
“We believe the transaction will ultimately, significantly enhance the value of the Snorkel business and deliver far greater shareholder value in the medium term.”
Xtreme is owned by Don Ahern, also owner of Ahern Rentals, in Las Vegas, one of the largest equipment rental companies in the US.
Ahern Rentals filed for bankruptcy in 2011 but has rstructured and re-emerged earlier this year under a Chapter 11 exit plan, with Mr Ahern still at the helm.
Xtreme is a Nevada-based manufacturer of telescopic material handlers, known as telehandlers, or rough terrain forklifts.
These machines are widely used by the construction, mining, resources, and agricultural sectors.
Until recently, Ahern Rentals was one of Snorkel’s largest customers. However, concerns over Snorkel’s finances and its ability to meet orders had resulted in a suspension of this relationship.
Tanfield believe that the proposed deal will allay the concerns of Ahern, and those of other customers, which should allow Snorkel to recover.
Comments are closed on this article.