Norwood Systems (ASX: NOR) has secured a $200,000 working capital facility from ex-director and substantial shareholder Dr John Tarrant to support near-term operations and growth activities. The facility comprises $150,000 available immediately and a further $50,000 drawable before the end of March, with repayment due 30 June 2026.
Norwood Systems secures $200,000 working capital facility from major shareholder
The Norwood Systems $200k Working Capital facility has been advanced by Plough Lane Superannuation Pty Ltd, a company controlled by Dr Tarrant. The Board has assessed the transaction as arm’s length, stating the terms are better for the company than prevailing market rates.
The loan attracts interest at 9.75% per annum, calculated daily on the outstanding balance and payable on the repayment date. If the loan is not repaid by 30 June 2026, a default interest rate of 12.75% (an additional 3%) applies until full repayment. The facility is unsecured and includes an establishment fee of 4% of the loan amount plus GST, payable within two days of the first drawdown.
Facility terms and structure
The working capital arrangement provides flexibility to manage operational requirements without immediate dilution to existing shareholders. The unsecured nature means no company assets are encumbered as security for the loan.
| Term | Detail |
|---|---|
| Facility Size | $200,000 |
| Tranche 1 | $150,000 (immediate) |
| Tranche 2 | $50,000 (before end March) |
| Interest Rate | 9.75% p.a. |
| Default Rate | 12.75% p.a. |
| Repayment Date | 30 June 2026 |
| Security | Unsecured |
| Establishment Fee | 4% + GST |
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What is a working capital facility?
A working capital facility is a short-term financing arrangement that provides businesses with access to funds for day-to-day operational expenses. Unlike equity capital raises, which issue new shares and dilute existing ownership, debt facilities allow companies to access liquidity without immediately impacting shareholder holdings.
For small-cap companies, these arrangements serve as operational bridges during periods of customer engagement and product development. They provide management with flexibility to pursue commercial opportunities whilst managing cash flow requirements through defined timeframes.
Management commentary
Paul Ostergaard, Managing Director
“This facility provides Norwood with additional flexibility to support near-term working capital while we progress customer engagements and product deployments. I’d like to thank Dr Tarrant for his continued support of Norwood and for making funding available on terms the Board considers attractive for shareholders.”
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Near-term outlook for Norwood Systems
The funds will allow Norwood the flexibility to pursue growth opportunities and manage its working capital efficiently. The company’s focus remains on advancing its voice communication services whilst managing operational requirements through to mid-2026.
The 30 June 2026 repayment date provides shareholders with a defined timeline to monitor the facility’s duration and the company’s progress towards commercial activities during this period.
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