VDM Group shareholders have voted in support of the troubled contractor and consulting group’s plan to raise up to $52 million to return its balance sheet to the black.
Shareholders at a general meeting this morning overwhelmingly supported the 5 cents per share capital raising, which VDM said would raise the funds required to retire $20 million in bank debt and generally increase working capital.
In June, VDM said it expected to report a net loss after tax of around $35 million to $40 million, taking into account a number of significant writedowns, including $14 million, associated with legacy contracts, and a $21 million goodwill impairment recorded in the first half of the year.
In May VDM officially appointed Andrew Broad as the successor to Ken Perry as chief executive
VDM chairman Michael Perrott said key elements of VDM’s growth strategy had already been implemented, including a shift to a ‘design and construct’ business model, simplifying the corporate structure and making significant reductions to overhead costs.
“Let me assure you that the company’s board and management team is working very hard to respond decisively and effectively to the challenges that we face,” Mr Perrott said.
“Many of the tough decisions have already been made and we are hopeful that you will support the company’s capital raising, which will give us a solid foundation to restore profitability and deliver shareholder value.”
VDM shares remain in a trading halt first announced on June 13 until the capital raising is completed.
Its stock last traded at 16 cents.
