The group issued a statement to shareholders on Tuesday (4 December) in which it revealed its attempts to restructure its£40m debts through a debt for equity swap would result in a 'considerable dilution' for shareholders.
VFG has already sold off its non-core assets, including the bulk of its stake in the Local Broadcasting Group (LBG) and its sales and manufacturing divisions, but the restructure has failed to rally its shares, which are now around the 1p mark.
The group was dealt a further blow last week when LBG went into administration (Broadcast, 30.11.01) and has now had to write off its remaining shareholding, valued at£2.05m based on the original subscription price of£1 per share.
In October, the group made 30 per cent of its staff redundant as well as completing the disposal of its sales and manufacturing divisions in a£4.1m management buyout led by former VFG chief executive David Stamp.
The new company, known as The Industry, consists of the former VFG sales division, which trades as The Film Game and Film Stock Centre/Blanx, and the manufacturing division, which trades as Formatt Filters.