Nuchev taps major shareholder for A$4M working capital facility
What's the deal? Australian nutritional and wellness company Nuchev (ASX: NUC) has secured an A$4 million unsecured working capital facility from substantial shareholder H&S Global Holdings. The facility, split into two A$2 million tranches, matures on March 31, 2028, and carries interest at the Bank Bill Swap Rate plus a 10% margin.
Nuchev chief executive officer Nathan Cheong said the facility "provides the company with additional working capital flexibility to support the execution of its current growth plans across the group."
Why now? Nuchev is in expansion mode. It sells its Oli6 infant and toddler nutrition brand through Australian pharmacy and grocery channels, China's cross-border e-commerce and general trade channels, and the recently launched Vietnam market. The company also holds practitioner brands Bio Practica and Medicine Tree, operates the bWellness distribution arm for European brands in Australia and New Zealand, and has exclusive Australian distribution rights for Brauer, Skin Physics, and Rapid products.
The facility is designed to support short-to-medium-term growth across this diversified portfolio.
What could go wrong? Borrowing from a major shareholder raises governance questions. Nuchev disclosed the arrangement as a related party transaction under ASX listing rules but said its board determined the terms are arm's length, and shareholder approval is not required.
The interest rate — a floating benchmark plus 10% — is steep. Interest and fees can be capitalised at Nuchev's election, meaning the debt balance could grow if the company opts not to pay cash. A 1% line fee on undrawn amounts and a 2% establishment fee add to the cost.
The signal: Small ASX-listed consumer brands often struggle to access traditional bank financing on favourable terms, especially during growth phases with uncertain cash flows. Turning to a supportive shareholder for working capital is a pragmatic move, but it underscores how capital-constrained smaller listed companies can be — and how dependent they may become on key backers to fund expansion.
Read more: foodanddrinkbusiness.com.au
