Synertec Secures A$4 Million Debt Extension, Total Facility Now A$19 Million

Strengthening Financial Flexibility

Synertec Corporation Limited (ASX, SOP), a Melbourne-based technology developer specialising in renewable energy solutions, has announced a significant extension to its debt facility with Altor Capital. The new agreement increases the total available funding to A$19 million, with an immediate tranche of A$2.5 million accessible to the company and a potential additional tranche of A$1.5 million pending Altor’s investment committee approval.

This capital injection is designed to provide Synertec with enhanced financial flexibility, particularly to support working capital needs while maintaining momentum on the deployment of its flagship product, Powerhouse. Powerhouse is a 100% renewable, portable solar battery energy storage system (BESS) microgrid that delivers reliable base load power to critical remote industrial sites, a technology that has already demonstrated five years of continuous operation in Australia's outback.

Balancing Growth and Financial Discipline

The facility extension comes with a 16% annual interest rate and includes a series of financial covenants aimed at ensuring Synertec’s operational and financial discipline. These covenants include maintaining minimum cash balances and borrowing base requirements tied to the company’s assets and receivables. The loan term extends 18 months from signing, with interest-only repayments and the option for voluntary prepayments without penalties.

As part of the agreement, Synertec will issue approximately 7.8 million warrants to Altor Capital, exercisable at 2 cents per share over the next four years. This equity-linked component reflects a strategic balance between debt and equity financing, aiming to minimise dilution for existing shareholders while providing Altor with potential upside participation.

Strategic Endorsement and Outlook

Synertec’s Managing Director, Michael Carroll, highlighted the importance of this facility in supporting the company’s path to profitability, noting the improved trading conditions and operational stability. Altor Capital’s Chief Investment Officer, Ben Harrison, echoed this sentiment, recognising Synertec’s progress in stabilising its engineering business and the potential for scaling up the Powerhouse technology.

While the extension signals confidence from a key financial partner, the conditional nature of the second tranche introduces some uncertainty. The company’s ability to meet financial covenants and demonstrate continued operational improvements will be critical to unlocking the full facility amount.

Overall, this capital structure enhancement positions Synertec to accelerate its renewable energy solutions rollout while managing financing costs and shareholder dilution prudently.