VDM Group Limited
(ASX:VMG) says it has received a letter of demand for $2.72 million from BHP Billiton Iron Ore
(ASX:BHP) in relation to the Central Reg Camp Bulk Earthworks contract.
Both VDM and BHP have disputed claims relating to the contract. The project involves the Bulk Earthworks and construction of a 502 man camp and 5km of access roads.
The VDM Group was awarded two contracts worth around $31 million in November 2011 with completion due in July 2012.
VDM saw an 81 per cent drop in revenue in 2014 as it closed out a large suite of active construction contracts and did not enter any new contracts.
The company is now focused on developing its equipment division by bringing Asian manufactured heavy equipment to the Australian market.
VMD Group says it will seek legal action in regards to the request from BHP.
VDM Group reported a net loss of $21.4 million for the 2014 financial year.
