The company said a binding subscription agreement, still conditional on shareholder approval, represented 600 million new fully paid ordinary VDM shares – and about 40% of the company’s issued share capital.

The transaction will see H&H boss Dongyi Hua – CITIC Pacific Mining’s former executive chairman and chief executive – appointed to the VDM board as managing director.

Hua will then be able to nominate two non-executive directors

VDM managing director Andrew Broad will step down following completion of the placement, while Michael Perrott remains as non-executive chairman.

The proposal has been fully recommended by the VDM board.

“The investment by H&H at an attractive premium price for shareholders strengthens the balance sheet, positions the business to target new contracts, and enables the company to utilise the contacts, skills and experience of a high-calibre individual such as Dr Hua,” Perrott said.

Hua said his company’s goal was to grow VDM’s current strategy.

“H&H believes that with additional capital, and H&H’s strong relationships within the engineering and construction sector, in particular with Chinese stakeholders, it can significantly enhance the growth and sustainability of VDM’s project pipeline,” he said.

Shares in VDM were trading 45.4% higher today at 1.6c.