VDM s executive chairman and interim chief executive Dongyi Hua. Picture: Gerald Moscarda/The West Australian.
VDM's executive chairman and interim chief executive Dongyi Hua. Picture: Gerald Moscarda/The West Australian.

UPDATE 2.30pm: Struggling contractor VDM has been forced to tap shareholder Australia Kengkong Investments Co for a $4.5 million convertible loan just months after raising $13.4 million as part of a plan to recapitalise the business.

If approved by shareholders, the loan would boost Kengkong's holding in VDM from 19.82 per cent to 29.9 per cent, giving it a seat on VDM's board.

Interest on the loan would be charged at 10 per cent until shareholders approve conversion of the loan at a meeting to be convened before October 20.

Should shareholders oppose conversion of the loan, VDM would be charged an interest rate of 15 per cent and an additional $45,000 fee.

Funds raised from the loan would be used for working capital.

KengKong is controlled by Hong Kong-based investor Hiu Ming Luk.

VDM's executive chairman and interim chief executive Dongyi Hua owns 36 per cent of VDM through his company H&H Holdings Australia.

Shares in VDM were steady at 0.8 cents at the close.

The West Australian

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