VDM Group has flagged a full year loss of more than $35 million, and says it plans to bolster its balance sheet through the launch of a pro-rata share issue to its existing shareholders to raise up to $52 million.
The proposed 5 cents per share capital raising will raise a minimum of $28 million, and is subject to receipt of ASX waivers and bank debt documentation finalisation.
VDM said its shares would remain in the trading halt it announced June 13 until the capital raising is completed.
"The industry wide delays in the award of tenders has led to the decision by the board that it is prudent to increase working capital and pay down or eliminate senior bank debt," VDM said in a statement.
"This will allow the company to retain sufficient operational capacity in the business to service anticipated new contracts.
"This coupled with the prevailing market volatility meant that the equity issue need to be done at an appropriate discount."
VDM said it had in excess of $1 billion in tenders awaiting adjudication.
VDM also updated its earnings guidance, saying the delay in contract awards would result in full year revenue of $140 million, for an EBITDA of between $5 million and $10 million.
Significant writedowns include an additional $14 million, associated with legacy contracts, and a $21 million goodwill impairment recorded in the first half of the year.
VDM said it expected to report a net loss after tax of around $35 million to $40 million, taking the writedowns into account.
The company also said it would continue to progress the sale of non-core property assets to raise an additional $20 million.
It's been a tough year for VDM, which appointed a new chief executive in May, Andrew Broad, after Ken Perry retired in February.
In February, the company booked a first half after tax loss of $16.4 million.
Its stock last traded at 16 cents.
