vrl proposal to preference shareholders, page-4

IMO the buyback is ripoff of the preference shareholders for the following reasons:

1. The reason that both the common and preference shares fell is because of the dividend cut(s). Both were instigated by the company. Cause the share prices to fall and then buy them back cheap. Prior to the cut the prefs were trading at $1.45 per share.

2. The cash component is only 25 cents. The rest is in the form of an unsecured note which will trade at a discount to face value.

3. The preference shares get dividends along with franking credits - a very valuable part of the total compensation to the preference shareholders. The interest (if paid - you want to trust these guys???) is 100% taxable with no tax benefits.

4. The minimum we should get is the cash equivalent price of a common share - the preference shares have a right of being converted into common shares in the event of a take over. We should also get a prorata share of the preference dividend for the number of months until (if and when) the company buys the preference shares back along with the franking credits.

5. As long as the preference shares are outstanding, they prevent the Village People from paying themselves huge dividends or taking over the company.

What's next????

Austereo will either be sold or also be given the same treatment. If sold, the money will be used to buyout the rest of the Village common shares at a huge discount to NTA.

If bought by Village, more funny money paper to shareholders??????