06/05/2014 - 14:57

VDM taps director for loan

06/05/2014 - 14:57

Bookmark

Save articles for future reference.

Engineering contractor VDM Group has announced a capital raising which would lift the combined stake of two of its directors to almost 65 per cent.

VDM taps director for loan
VDM executive chairman Dongyi Hua. Photo: Attila Csaszar

Engineering contractor VDM Group has announced a capital raising which would lift the combined stake of two of its directors to almost 65 per cent.

VDM told the market it has tapped Australia Kengkong Investments Co for a $4.5 million loan in exchange for a greater equity stake in the company.

Kengkong is a private investment vehicle ultimately controlled by VDM non-executive director Hiuming Luk, who was appointed to VDM's board in March this year.

VDM said the loan would be convertible into 450 million shares, subject to shareholder approval.

This would lift Kengkong's stake in VDM from 19.8 per cent to about 30 per cent, which would entitle Kengkong to appoint a director to the VDM board to serve as chairman.

An entity associated with VDM executive chairman Dongyi Hua currently holds a stake of about 34.7 per cent in the company.

VDM said the funds would be used for general working capital purposes as the contractor implements a new business strategy focused on construction, services and equipment, procurement and mining projects.

The company last year unveiled a recapitalisation proposal that involved some of its creditors being paid in shares, and warned at the time that the company was at risk of being placed in administration if the package did not proceed.

VDM shares closed the day's trade steady at 0.8 cents.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options