Back from a good holiday and noticed the Cape deal finally...

Back from a good holiday and noticed the Cape deal finally landed.

As expected the counter party to a VDM deal nearly always come out best, in this case CFC.
The deal is 48M plus 5m soft.

52M was the amount required, just to reach asset value of the business.

At 48m this means the business is being sold at less than asset value with a 100m order book, going concern and earnings completely given away.

CFC behind closed doors, without competitive bidders must be laughing.

IMO, the deal is easily short by 5M.

Why would they take this deal and execute in this manner?
It's not financial, therefore likely to be internal politics / people pressure.
I wouldn't be surprised to see some VDM roles move across to CFC with "incentives / interests", (executed under the CFC banner)

Let's place a 5M shortfall into context with margins and revenue.
Broad was running his divisions at a loss before being promoted to CEO, however lets assume 6% profitable margins.
To generate 5M of cash, would require circa 80M of revenue.
Every dollar kept in the business is valuable.

VDM agreed to a closed door non competitive bid environment that lead to a low ball offer.

Even with low expectations, VDM leadership underwhelm.
Mav