VDC Corp. Ltd. Announces Proposed Change in Core Business; Executes Letter of Intent to Acquire Wireless Communications Systems.

HAMILTON, Bermuda--(BUSINESS WIRE)--Oct. 6, 1997--VDC Corp. Ltd. (NASDAQ: "VDCLF") announced Monday that it has resolved to change the direction of its core business from the ownership and management of real properties and mining interests to the operation of wireless communication systems abroad.

In this regard, the company also announced that it has signed a Memorandum of Understanding to acquire NovoComm Inc., a privately held company, and a Letter of Intent to acquire a minority interest in a private company that operates wireless telephony systems in China from PortaCom Wireless Communications Indc.

Both companies' boards of directors have approved the Memorandum of Understanding. A closing date has been tentatively scheduled for Dec. 15, 1997.

The Memorandum of Understanding provides for VDC to acquire 100% of the outstanding shares of NovoComm for newly issued shares of VDC common stock. NovoComm shareholders will receive 33,300,000 VDC shares upon closing and an additional 4,700,000 VDC shares when VDC acquired PortaCom's minority interest in the wireless telephony company.

If the two transactions close, VDC will have 47 million shares outstanding upon consummation and it is expected that VDC will change its name to NovoComm.

NovoComm, through its affiliates' partnerships, holds licenses and/or operates systems in wireless telephony, FM radio and paging both in Russia and the Ukraine.

NovoComm has entered into a definitive agreement which upon the closing of such agreement will provide it with a right to operate portable, mobile and fixed wireless telephony and paging services throughout the Russian Federation.

The wireless telephony systems are currently operating in 10 Russian cities on a pre-commercial basis, providing primarily mobile telephony services to somewhat less than 1,000 total customers. The closing of this agreement is subject to certain conditions and there can be no assurances that a closing will occur in a timely manner, if at all.

In paging, NovoComm affiliates have systems operating in five cities, four commercial and one pre-commercial, and their licenses cover both the Russian Federation and Ukraine. Kiev, its first capital city system, is in a pre-commercial phase, but has more than 150 subscribers.

It is expected that this system should begin soliciting subscribers by late October. In FM radio, NovoComm has five stations operating in Russia and Ukraine, with additional stations in preparation or planned. NovoComm is a developmental stage company and to date has not generated any material revenues from its operations.

The Letter of Intent with PortaCom provides that VDC would acquire Portacom's minority interest in the wireless telephony company in return for 5,300,000 shares of VDC common stock and $700,000 in cash.

Both the NovoComm Memorandum of Understanding and the PortaCom Letter of Intent are preliminary in nature and subject to terms of definitive agreements which are in the process of being negotiated.

It is anticipated that both agreements will be subject to shareholder consent, the completion of due diligence, regulatory approvals and filings and other necessary conditions. There is no assurance that definitive agreements for either transaction will be reached or that either transaction will be consummated.

Fred Moran, NovoComm's chairman and CEO will continue as chairman and CEO of VDC/NovoComm after the merger.

Moran said, "Although NovoComm has sufficient capital to execute its strategic plans for at least the next 12 months, we believe that NovoComm's efforts to become a major telecommunications service provider and FM radio station operation in Russia and Ukrania will be greatly enhanced by the easier access to the capital markets afforded to companies whose stock is traded publicly.

"Its licenses cover a population area of 220,000,000 people, providing it with the potential to build substantial revenue and cash flow streams. The acquisition of PortaCom's minority interest in the wireless telephony company would provide a growing telecommunications asset in a contiguous and major country, where the business growth potential is vast.

"With these transactions, we believe we will have the key ingredients in place to build shareholder value over time. And to build shareholder value will be our primary mission."

Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements made by the company involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different form any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include but are not limited to, risks associates with international operations, dependence on licenses, government regulations, technological changes, intense competition and dependence on management. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements.

The company disclaims any obligation to update any such statements or to publicly announce any updates or revisions to any of the forward-looking statements contained herein to reflect any change in the company's expectation with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements.

CONTACT: Tom Madden, 800/941-1558