In preliminary results released today, the company said it would post a net loss after tax of $84.4 million for the year, due largely to its recent removal from an unspecified construction site due to a dispute over the status of a material contract.

VDM said the value of works at the site performed prior to its removal remained unpaid and, as a result, represented the majority of the company’s second-half loss of $24.3 million over the year.

This H2 figure follows a $60.1 million loss for the six months to December.

VDM said that it was reviewing its options regarding the unpaid work at the disputed site.

“The company is seeking resolution to this matter and will pursue the unapproved claims and variations for this project,” it said.

“All amounts recovered from this project will be earnings and cash flow accretive for the company in the period they are recovered.”

As a result of the dispute and VDM’s removal from the project site, the company has terminated an existing share subscription agreement with H&H Holdings Australia and negotiated an alternative capital-raising arrangement.

The new arrangement – unanimously supported by the VDM board but still contingent on shareholder approval – would provide for an initial $A6.4 million in funding plus the opportunity to acquire a further $5 million loan.

In the event VDM requires a further loan, it could have access to up to $11.4 million of funding over the next 12 months from H&H.

Shares in VDM fell 47.1% Wednesday after the company announced the contract dispute, but regained 11.1% yesterday to 1c.