Ann: VDM Company Update , page-17

I did hear from VDM headquarters, much quicker this time than the last time when it took several calls, e-mails, and general hounding.

I basically posed the question "why should the company not be liquidated?" Given that their core business is running at a loss (before non cash items are brought in) and that the NTA value is higher than the current share price, I asked why they shouldn't just wrap things up and return capital to shareholders to let them apply the capital to other opportunities rather than let it bleed away with loss after loss.

They pointed out that most of their projects do make money, but that some do not. Sometimes that is because of blowouts in cost, accommodation shortages, customers going into administration and not paying up, or a variety of other reasons. They do have work in hand, of course, but we agreed that there is no benefit to having even a billion dollars worth of work lined up if none of it leads to a profit. (In fact, I made the point that if they can't make a profit on their core business, they are literally better off having NO work in hand.)

The main argument from the company is that the restructuring is taking longer than expected and is more difficult than expected.

I did point out that we have heard this all before, and that a lot of shareholders have little faith that the current management can turn things around, especially as the same people presided over the creation of this mess. (The fact that Barry Nazer had the gall to offer himself for re-election to the board after presiding over a 99% drop in the share price still bothers me, though I didn't mention this in conversation.)

Discussions were pretty frank, which is what I have come to expect from VDM in previous conversations.

I feel it is not worth selling at current levels, as any profit would be pretty sizable given the depressed market cap. That's not to say any profit is going to come through. I voted against the remuneration report last year (as did many others) and given the results of that vote, another failure to get over the threshold will mean the board is spilled. I have no qualms about that, and I mentioned this to VDM. I do not care about anyone's reputation or about how difficult their job is. I put down the equivalent of a down payment on a house in the capital raising, and that's what I care about. Anyone who allows the capital of my company to bleed away in loss making projects (and that's pretty much the entire board) has no place in my company.