VDM Group (ASX:VMG) has executed an agreement with Australia...

VDM Group (ASX:VMG) has executed an agreement with Australia Kengkong Investments Co to provide unsecured funding of A$10 million via a loan which, subject to shareholder approval, may be convertible into 1 billion VMG shares at $0.01.

Kengkong will advance A$10 million to VDM in two tranches of A$3 million and one tranche of A$4m during the period 25 September to 14 November 2014.

That Kengkong has made this further significant investment is a ringing endorsement of the company.

VDM will use the funding for working capital purposes in the ordinary course of business and project development proposals which are approved by Kengkong.

Interest is calculated at a rate of 8% per annum until one month after the date of the shareholders meeting held to obtain approval, and 13% per annum following that date.

A default interest rate of 2% plus the applicable interest rate shall apply to any amount VDM fails to pay by the time it is due under the agreement.

The $10 Million Convertible Loan is in addition to the A$4.5 million convertible loan provided by Kengkong in May, and provides financial flexibility to continue to implement its new business strategy.

This new strategy is focused around construction, services and equipment, procurement, and mining projects.

VDM is capped at $38 million.