19/10/2011 - 12:52

VDM raises $35m from entitlements offer

19/10/2011 - 12:52

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VDM raises $35m from entitlements offer

VDM Group says it is set to make a return to profitability, after reporting its entitlements offer raised $7 million more than its $28 million minimum subscription target.

The capital raising, however, fell well short of VDM’s maximum $52 million limit.

Managing director Andrew Broad said the raising received solid support from both existing and new shareholders

“The proceeds will allow VDM Group to fully repay all senior bank debt, while the balance of funds will provide working capital to underpin future business growth,” Mr Broad said in a statement.

“The successful capital raising leaves VDM with a strong balance sheet and well positioned to participate in the continued upswing in projects in the resources and energy sectors.:

The construction contracting group has been in the midst of a major restructuring effort, after confirming a full-year net loss of 35.5 million last financial year.

VDM also incurred a $106 million after tax loss for the 2009 financial year.

Chief executive Ken Perry retired unexpectedly in February and was ultimately replaced by Mr Broad in May.

More recently, VDM announced it was considering an offer to sell its crushing and earthmoving subsidiary, Cape Crushing and Earthmoving Contractors.

The company said earlier this month it had received a non-binding proposal for cape, and the undisclosed bidder was conducting due diligence on the division.

VDM said on October 14 that two new contracts collectively worth $18.4 million had pushed its current year order book to more than $100 million.

“Our restructuring initiatives are already having a positive impact on VDM’s profitability and the completed capital raising, along with new contracts and other restructuring initiatives, will underpin an early return to profitability,” Mr Broad said.

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