Norwood raises US$10m from US investors

By Helen Schuller
Friday, 02 September, 2005

Norwood Abbey (ASX:NAL) has raised AUD$13.3 million (US$10 million) through US institutional investors to make the final payment on its products used in vision correction surgery and to expand production.

"It's a clear indication of the strength of support that exists from US investors -- it is a significant amount of money and a strong endorsement of Norwood Abbey's key strategy to grow the business," said the company's senior VP of corporate development, Bernie Romanin.

"It is likely to cover an outstanding payment to CIBA Vision and for general working capital until we get cash positive. We plan to expand production of our products to get more in the market -- it is going to be the key driver to achieve cash flow positive and profitability for the company on a month by month basis," said Romanin.

In May 2004 Norwood Abbey acquired the global license for the key components of Epi-LASIK technology -- the Centurion SES System and EpiEdge (epikeratome separator) -- and their associated US FDA and European CE Mark approvals from CIBA Vision, a wholly-owned subsidiary of Novartis.

"It's a small device which uses a small disposable separator to prepare the surface of the eye prior to laser treatment. Previously there was a need to cut through the surface of the eye. It is a less invasive and safer technique -- it has clearly been seen in the market as the next generation technique," said Romanin.

The US$10 million raised is 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 and Tiedeman Global Emerging Markets $US3 million. The notes are to be subscribed for in two tranches with US$5 million for a two year term and US$5 million for a three year term which is subject to shareholder approval.

The current total US institution shareholding in Norwood Abbey is more than 25 per cent, and will increase to 35 per cent if all convertible notes are converted into ordinary shares.