ARC Funds secures $5 million standby capital facility on its own terms
ARC Funds Limited (ASX: ARC) has entered into a $5 million Capital Placement Facility with Securities Vault Pty Ltd, providing the diversified financial services company with standby access to equity capital over an initial 12-month term.
The structure is deliberately flexible. ARC retains complete discretion over whether, when and how much capital is raised, allowing the Board to tap the facility only when conditions are considered appropriate.
Importantly, the Company has not received any funds in respect of the facility as at the announcement date. This is standby access to equity capital, not a completed raise.
An initial tranche of 10,000,000 fully paid ordinary shares has been issued into the facility, taking ARC’s total shares on issue to 90,254,707. The facility is intended to support the Company’s capital management strategy, strategic investments, acquisitions, working capital requirements and general corporate purposes.
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How the facility works — flexibility without immediate dilution
The 10,000,000 fully paid ordinary shares have been issued into the facility pursuant to ARC’s available placement capacity under ASX Listing Rules 7.1 and/or 7.1A. These shares form the initial tranche available to Securities Vault.
Securities Vault may only sell shares after receiving a drawdown notice from ARC. Each notice specifies, among other matters, the number of shares to be sold and the applicable minimum sale price set by the Company.
Funds are received progressively as shares are sold. Net proceeds, after deduction of the agreed facility fee, are then remitted to ARC in accordance with the Facility Agreement.
A key differentiator is the absence of additional equity-linked securities. No attaching options, performance securities or other equity-linked securities are issued as part of the facility, with any future funding comprising ordinary shares only. According to the Company, this provides a simpler and more transparent capital management solution designed to help minimise unnecessary shareholder dilution.
Key terms at a glance
The core terms of the facility are summarised below.
| Item | Detail |
|---|---|
| Facility Amount | Up to $5,000,000 |
| Initial Term | 12 months (extendable by mutual agreement) |
| Initial Shares Issued | 10,000,000 ordinary shares |
| Initial Cash Received | Nil |
| Future Funding | At ARC’s discretion via drawdown notices |
| Minimum Sale Price | Determined by ARC per drawdown |
| Success Fee | 6% of gross sale proceeds |
| Establishment Fee | $25,000 plus GST |
What a standby equity facility means for investors
A standby equity capital facility is a pre-arranged arrangement that a company can access only when it chooses. This differs from a conventional placement, which typically requires an immediate capital raising at a set price.
The distinction matters here because ARC controls the timing, size and minimum price of any drawdown. This design is intended to reduce the risk of raising capital at unfavourable prices, giving the Board room to act when market conditions are considered appropriate.
There is a balance to consider. Any drawdown still results in shares being sold into the market, so utilisation of the facility does carry dilution. The “ordinary shares only, no attaching options” structure is designed to limit the extent of that dilution compared with arrangements that bundle in additional equity-linked securities.
Capital management approach and the Chairman’s view
The Board has stated it intends to use the facility prudently, and only where the issue price is considered to appropriately reflect shareholder value. Drawdowns are not intended to occur on a continuous basis.
Each potential drawdown will be assessed having regard to market conditions, the Company’s funding requirements and the interests of existing shareholders. The facility is intended to complement, rather than replace, ARC’s broader capital management initiatives.
The facility is intended to complement, rather than replace, ARC’s broader capital management initiatives, which have included scrip-based acquisitions such as the Term Deposit Shop stake increase that lifted the company’s ownership in the $530 million platform to 74.48% earlier in 2026.
Michael Walker, Chairman
“The establishment of this facility strengthens ARC’s financial flexibility and provides the Company with an additional source of capital to support the execution of its strategic objectives. Importantly, the Board retains complete control over whether, when and at what price the facility is utilised. Together with the strategic placement completed today, ARC has further strengthened its capital position while maintaining flexibility to pursue future growth opportunities and deliver long-term shareholder value.”
The Chairman references a strategic placement completed on the same day, which is a separate transaction not detailed within this announcement.
Adviser and company background
Lodge Partners acted as Corporate Adviser to ARC Funds Limited in relation to the establishment of the facility. Lodge Partners is described as an Australian institutional stockbroking and corporate advisory firm with experience advising ASX-listed companies on equity capital markets and strategic transactions.
ARC Funds Limited is an ASX-listed diversified financial services and investment company focused on building long-term shareholder value through strategic investments, funds management, wealth management and complementary financial services businesses.
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