NAL Norwoodabb Fpo

Norwood Abbey Limited (OTC:NABYF) (ASX:NAL): Key points: -- US investors to inject US$10 million (A$13.3 million) into Norwood Abbey -- Notes convertible prior to maturity at A$0.42 per share -- Further evidence of strong US investor support Norwood Abbey Limited (OTC:NABYF) (ASX:NAL) today announced that it has reached agreement with US institutional investors to raise US$10 million (approximately A$13.3 million). The agreement has been completed with the assistance of Jeffries & Co. of New York and BBY of Sydney. The funds are in the form of unlisted convertible notes. Indus Capital Partners, a private fund management group focusing on the Asia-Pacific region, is subscribing for US$7 million of the convertible notes and Tiedemann Global Emerging Markets US$3 million. The notes are to be subscribed for in two tranches: US$5 million for a two year term and US$5 million for a three year term. The three year notes are issued subject to shareholder approval at an EGM to be called forthwith. The EGM notice will set out full details of the arrangements in relation to the notes and other terms. Summary of the terms of the notes: -0- *T Total funds raised: US$10 million Interest rate: Tranche A 3.5% per annum; Tranche B 4.5% Face value: US$1.00 Term: Tranche A 2 years; Tranche B 3 years Conversion price: A$0.42 during the Term or 10% discount to VWAP at maturity *T Attaching to the notes are 8.335 million options to acquire shares in the Company at 65 cents per share (being 0.8335 options for each note issued). The options have a term of four years, with the potential to raise a further A$5.4 million. Executive Chairman Peter Hansen comments: "We are delighted with the strong ongoing support from our US institutional investors. The confidence shown in injecting such a significant sum, with conversion during the Term at a 33.3% premium to last Friday's closing share price, should be seen as a strong endorsement of Norwood's prospects. A further strong endorsement lies in the agreement to an option exercise price at a 133% premium to last Friday's closing share price." The fundraising is further evidence of the continuing support for Norwood in the US market. The current total US institutional shareholding in Norwood Abbey is in excess of 25%; this will increase to approximately 35% if all convertible notes are converted into ordinary shares. The convertible notes are convertible at the option of the holders at A$0.42 per share at any time during the term of the notes. At maturity, the notes are convertible at the discretion of the note-holder at a 10% discount to the volume weighted average closing share price in the twenty trading days prior to maturity. The Company intends to use the funds to meet all remaining financial obligations to CIBA Vision under the EyeCare purchase agreement, an expansion of the production of EyeCare products and additional cost reductions already foreshadowed in previous announcements. The remainder of the funds raised are intended to provide the necessary working capital to take the Company (excluding Norwood Immunology Ltd) through to cash-flow positive status on a month-to-month basis. This fund raising, in the form of the convertible notes, supercedes the earlier advised plan (ASX March 29, 2005) approved by shareholders at the EGM on June 30 2005, for a possible additional equity investment by these same investors. For further information on Norwood Abbey, visit www.norwoodabbey.com.