Vivo Power has wiped out the entire $28.8 million principal of a shareholder loan owed to a company controlled by Kevin Chin, its executive chairman and chief executive.
The Nasdaq-listed developer of powered land and data centre infrastructure said the facility, extended by founding shareholder AWN Holdings, has been retired in two parts.
AWN converted $16.5 million of the debt by taking 165,000 convertible preference shares as part of the $50 million private placement announced on 29 July.
The remaining $12.3 million was repaid in cash from existing balances.
AWN is part of Arowana, the impact investment group Chin founded, and has committed to a minimum six-month lock-up on the shares it received.
The transaction leaves no principal outstanding under the loan, which dates back to VivoPower's early years as a public company and had appeared repeatedly in its filings with the US Securities and Exchange Commission. Accrued interest is still to be finalised and settled.
Because of Chin's dual role, the deal counts as a related-party transaction and was reviewed and approved by the audit and risk committee, made up entirely of independent directors.
The company said the conversion was priced on the same terms offered to the outside institutions taking part in the placement, which drew backing from investors in the United Kingdom, the European Union and the Nordic region.
Clearing the loan removes the associated interest cost and simplifies a capital structure that has long carried the legacy of the founder facility.
That matters as VivoPower moves into a capital-intensive phase.
The company is building out artificial intelligence data centre capacity in Norway and Finland, where cheap hydroelectric and wind power and a cool climate have attracted operators looking to run energy-hungry computing clusters at lower cost.
It also holds infrastructure in the United Arab Emirates.
VivoPower has recast itself over the past two years from a solar and electric vehicle business into what it describes as a partner for sovereign states seeking domestic control over power, data and computing capacity.
Listed since 2016 and certified as a B Corporation, it is one of a small number of London-managed companies attempting to position themselves in the Nordic data centre market.
The strengthened balance sheet gives it a cleaner platform from which to raise further capital for that expansion.