Uses proceeds to make $7 million principal repayment due December 31, 2020, to senior lender.
VANCOUVER, BC, Jan. 4, 2021 /CNW/ - Zenabis Global Inc. (TSX: ZENA) ("Zenabis" or the "Company") announces today that it has entered into a letter agreement (the "Letter Agreement") dated December 31, 2020, with a major Canadian licenced producer of cannabis (the "Buyer"), pursuant to which the Buyer has agreed to purchase $7 million (the "Purchase Amount") of dried cannabis on delivery terms to be agreed under a cannabis purchase agreement to be negotiated between the parties (the "Purchase Agreement").
At the Buyer's discretion, it may as an alternative to entering into the Purchase Agreement, enter into a private placement transaction with Zenabis (the "Placement"). In the event the Buyer chooses to complete the Placement as an alternative to the Purchase Agreement, Zenabis shall negotiate in good faith to conclude a definitive subscription agreement with the Buyer as soon as possible following the Buyer's notice of same. The Placement would be subject to applicable regulatory approvals, including from the TSX.
Zenabis has directed the Purchase Amount to be paid to its senior lender, a wholly-owned subsidiary of Sundial Growers Inc., another licenced producer of cannabis, to satisfy its principal repayment obligations of $7 million to the senior lender, which were due on December 31, 2020. The Company also satisfied its other debt obligations which were due December 31, 2020. The Letter Agreement and subsequent Purchase Agreement (or Placement), together with the sale of Bevo Farms Ltd. announced concurrently and the repayments of key debt obligations which were due December 31, 2020, has greatly improved the Company's liquidity position and overall financial capacity.
As a result of the $7.0 million repayment to its senior lender, and the concurrently announced sale of Bevo Farms Ltd. and the repayments of key debt obligations which were due December 31, 2020, the Company's debt totals $65.1 million, compared to $119.1 million as of September 30, 2020, the date of the Company's most recently released consolidated interim financial statements. Details of the Company's current debt structure is included below:
Principal |
Principal |
||
Outstanding at |
Outstanding at |
Interest |
|
In millions of Canadian dollars |
September 30, 2020 |
December 31, 2020 |
Rate |
Bevo Term Debt |
|||
Canadian Chartered Bank Financing |
$ 42.5 |
$ - |
Floating |
Long-term Cannabis Debt (>2 years) |
|||
Secured Debentures |
$ 51.4 |
$ 51.4 |
14.0% |
RDC Mortgage |
$ 2.0 |
$ 2.0 |
6.0% |
Near-term Debt (<2years) |
|||
New Secured Debentures |
$ 7.5 |
$ - |
14.0% |
Unsecured Convertible Debentures |
$ 3.8 |
$ 3.8 |
6.0% |
Secured Convertible Note |
$ 2.5 |
$ 0.2 |
11.0% |
Unsecured Convertible Note |
$ 9.4 |
$ 7.7 |
6.0% |
Total |
$ 119.1 |
$ 65.1 |
About
Zenabis is a significant Canadian licensed cultivator of medical and recreational cannabis. Zenabis employs staff coast-to-coast, across facilities in Atholville, New Brunswick; Langley, British Columbia; and Stellarton, Nova Scotia. Zenabis currently has 111,200 kg of licensed cannabis cultivation space across three licensed facilities in Canada, together with its cannabis import, export and processing joint venture, ZenPharm, operating from Birżebbuġa, Malta.
The Zenabis brand name is used in the cannabis medical market, and the Namaste, Blazery, and Re-Up brand names are used in the cannabis adult-use recreational market.
The TSX has not reviewed and does not accept responsibility for the adequacy of the content of the information contained herein. This press release contains certain "forward-looking statements" and "forward-looking information" as defined under applicable Canadian securities laws. Forward-looking statements or forward-looking information involve risks, uncertainties and other factors that could cause actual results, performances, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward- looking statements or forward-looking information can be identified by words such as "anticipate," "intend," "plan," "goal," "project," "estimate," "expect," "believe", "future," "likely," "may," "should," "could", "will" and similar references to future periods. All statements other than statements of historical fact included in this release are forward-looking statements, including, without limitation, statements regarding the timing of and other matters associated with the execution of the PSA or completion of the Placement. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements or information. Important risks and factors that could cause actual results to differ materially from Zenabis' plans and expectations include the actual results of business negotiations, marketing activities, adverse general economic, market or business conditions, regulatory changes and other risks and factors detailed herein and from time to time in the filings made by Zenabis with securities regulators and stock exchanges. Any forward-looking statement or information only speaks as of the date on which it was made and, except as may be required by applicable securities laws, Zenabis disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. Although Zenabis believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance, and accordingly, investors should not rely on such statements.
For more information, visit: https://www.zenabis.com.
SOURCE Zenabis Global Inc.
Media Relations: Email: [email protected], Phone: 1-855-936-2247; Investor Relations: E-mail: [email protected], Phone: 1-855-936-2247
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