Ann: Extension of Reconstruction Deed , page-7

About 2 weeks ago I emailed Caitlin Smith at Ferrier Hodgson and got quite a reasonably fulsome reply but it was not happy news. Hopefully Caitlin will not object to my posting her reply here.

By way of update, the Deed Administrators are currently pursuing a reconstruction of Windimurra Vanadium Limited's (WVL) ASX listed shell. In May 2010, a Reconstruction Deed was executed with Trident Capital, who is the proponent of the reconstruction. If the reconstruction is successful, WVL's shares will be re-quoted on the ASX. Please note that we are unable to comment on the likelihood of success of the proposed reconstruction, as the likelihood of success depends on various regulatory and commercial factors.

Currently, Trident Capital is endeavouring to satisfy certain conditions imposed by the ASX for the reconstruction to proceed further. The reconstruction is also subject to the satisfaction of certain conditions precedent in the Reconstruction Deed. The conditions precedent include obtaining and receiving approval from shareholders of the proposed reconstruction, at a shareholders' meeting to be convened by the Proponent. In this regard, the Proponent will provide shareholders with full information regarding the proposed reconstruction when such information becomes available, but in any event, before shareholders are required to vote in respect of the proposed reconstruction at the shareholders' meeting.


The reconstruction currently in place involves satisfying the conditions set by the ASX to have the trading ban lifted. Trident Capital is endeavouring to satisfy such conditions imposed by the ASX for the reconstruction to proceed further. The reconstruction is also subject to the satisfaction of certain conditions precedent in the Reconstruction Deed. The conditions precedent include obtaining and receiving approval from shareholders of the proposed reconstruction, at a shareholders' meeting to be convened by the Proponent. In this regard, the Proponent will provide shareholders with full information regarding the proposed reconstruction when such information becomes available, but in any event, before shareholders are required to vote in respect of the proposed reconstruction at the shareholders' meeting.


Some of the conditions imposed by ASX in this case involve third parties and have proven difficult and time consuming to resolve, although we are advised by Trident Capital that they are making significant progress with resolving these issues. In that regard I note that on 29 July 2011, the due date for the outstanding conditions precedent in the Reconstruction Deed were extended further to 31 December 2011 (originally 31 December 2010). Therefore, subject to no further delays by Trident Capital in complying with the conditions imposed by the ASX, we expect the abovementioned shareholders' meeting to be held on or before 31 December 2011.


If the reconstruction is unsuccessful, documentation will be provided to shareholders in order for them to be written off for tax purposes.


In regard to a pay out to shareholders I note that there are no funds available for distribution to shareholders and therefore the best case scenario for shareholders is that the reconstruction is successful, resulting in the re-quotation of your shares on the ASX.


I have attached for your information the Report prepared by the Administrators pursuant to section 439A of the Corporations Act 2001 which details the investigations carried out in respect to the affairs of WVL. This report along with all other documentation that was provided to creditors of WVL is also available from our website (www.ferrierhodgson.com).


I hope I have been able to provide you with a better understanding on the matter.

My email to her was as follows:


Hi Caitlin

As a very small shareholder in WVL I wondered if you could spare a few moments and advise in layman?s terms what is happening with WVL?

I have read the material on your website and note that you have a deadline tomorrow ? 31st July 2011.

I understand that shareholders are last in line and seldom ever see anything and I am wondering if that is likely to be the case here. Either way it would be nice to have a bit of a heads-up as to the likelihood of a payout to shareholders and when do you think a decision will be made.


Presumably you?ll do a report on why WVL went bust. Who was to blame and whether criminal and / or civil action against the perpetrators is likely to achieve anything.

I look forward to hearing from you soon.

As I say it was not joyful reading.