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.