Dongyi Hua-led VDM Group is looking to strengthen its balance sheet by signing a share placement agreement with a private investor to raise $3 million.
In a statement today, VDM said it would place 250 million of its shares to the sophisticated private investor at a price of 1.2 cents per share.
The company also announced one of VDM’s major shareholders, China-based Australia Kengkong Investments, has increased its stake in the company to 45 per cent after converting $14.5 million worth of loans into shares.
VDM will issue 1.45 billion shares to Kengkong at a price of 1 cent per share.
“The VDM board is very pleased that Kengkong is exercising its conversion rights,” the company said in a statement.
“The conversion of the loans into shares significantly strengthens VDM’s balance sheet and capacity for growth.”
Shares in VDM were 11.1 per cent higher at 1 cent per share at the close of trade.