debt reduced by us7 million

DEBT REDUCED BY US7 MILLION
Key points:
· Funds generated through sale of Norwood Immunology shares
· Funds to be used to extinguish US$7 million convertible debt
· Retention by Norwood Abbey of 62.2 million shares (50.2%) of
Norwood Immunology shares
· A$1 million funding for Norwood Immunology
Medical technologies group Norwood Abbey Ltd [ASX:NAL] advises that it has
entered into an agreement with Indus Asia Pacific Master Fund, Ltd and Indus
Opportunity Master Fund, Ltd (collectively ‘Indus’).
Under the agreement, Norwood Abbey will sell to Indus 31,395,346 shares in
Norwood Immunology Ltd (‘NIM’) for approximately US$7.1 million.
Norwood Abbey has agreed with Indus to use the US$7.1 million to extinguish the
convertible debt facility extended by Indus to Norwood Abbey in August 2005.
Norwood Abbey’s convertible debt – which at June 30 2006 stood at approximately
US$13 million - will reduce to US$4.5 million following repayments to Indus (US$7.1
million) and Centrecourt (US$1.5 million).
This transaction enables Norwood Abbey to significantly reduce its debt while
facilitating the introduction to the NIM share register of a major institutional investor.
In respect of Norwood Abbey’s shareholding in NIM, following completion of the sale
of the NIM shares to Indus, Norwood Abbey will continue to be the largest
shareholder in NIM, with 62,219,654 NIM shares. This shareholding will represent
50.2% of NIM’s current issued share capital. Norwood will continue to be
represented on the board, however with a reduced number of nominees, reflecting
the changing nature of the composition of NIM's shareholder base.
Indus will itself become a major shareholder in NIM with 34,026,925 million shares
representing 27.0 % of the share capital of NIM. Norwood has agreed to support the
appointment of Indus Capital nominees to the NIM board in order to assist with
driving NIM's projects and business strategy forward.
With the reduction in its debt, Norwood Abbey believes that this transaction also
places it in a better position to focus on its business and the development of long
term strategies for extracting value from its remaining investment in NIM and from its
other current projects. It should also allow Norwood Abbey to focus on its longer
term goals.
Norwood Abbey also intends in due course to extend substantially similar terms to
existing US$3 million convertible noteholder Tiedemann Global Emerging Markets
as per the Indus transaction. The outcome of such an offer would be advised to the
market in due course.
In due course, Norwood Abbey will provide more specific guidance on its future
strategies.
The purchase of 31,395,346 shares in NIM by Indus is part of arrangements with
Indus, whereby NIM has entered into a secured facility agreement with Indus
Opportunity Master Fund, Ltd for A$1 million (the “Loan”) to provide short term
working capital funding. The Loan is a drawdown facility for up to A$1 million
repayable within 12 months of the first drawing of funds and bearing monthly
interest.
Confirming Norwood Abbey’s ongoing confidence in the future of NIM, subject to the
sale proceeding, Norwood Abbey will commit to a lock-in in respect of the majority of
its continuing shareholding. Norwood Abbey has also agreed to enter into an orderly
marketing arrangement for any disposal of NIM shares, for the benefit of NIM and all
of its shareholders.
Indus will become a significant shareholder in NIM, encouraging the Norwood Abbey
Board to have confidence in the future of Norwood Abbey’s ongoing investment in
NIM. Indus is a $4 billion global investment group and this significant increase in
their involvement in NIM brings considerable substance to the share register. Indus
also holds approximately 8.2% of the current issued capital of Norwood Abbey.
To find out more about the Norwood group, visit www.norwoodabbey.com
For further information please contact:
Norwood Abbey Ltd:
Lula Liossi
Corporate Communications Manager
(61 3) 9782 7333