CALGARY, AB, December 30, 2020 / PRNewswire / – Sundial Growers Inc. (Nasdaq: SNDL) (“Sundial” or “Company”) announced today that it has closed the purchase of a special purpose vehicle (“Investment”). Given the investment, in total $ 58.9 million in cash, it was financed from Sundial’s available cash reserves, which totaled $ 110 million immediately before the investment closes. All amounts are expressed in Canadian dollars, unless otherwise stated.
The special purpose vehicle owns $ 58.9 million of the total amount of the principal secured senior debt (“senior loan”) of Zenabis Investments Ltd. (“Zenabis”), a subsidiary of Zenabis Global Inc. ( “Parent”). The Senior Loan has an interest rate of 14% per annum and has a maturity of March 31, 2025, with capital repayments in certain circumstances over time, inclusive $ 7.0 million payable on 31st of December, 2020. The Senior Loan is secured by the assets of Zenabis and its subsidiaries and is secured by the Parent Company. Overall, the assets represent all of Zenabis’ cannabis-related assets.
Under the terms of the senior loan, Zenabis will also pay Sundial a royalty (“royalty”) based on quarterly revenue from sales of its medical, recreational and wholesale cannabis lines, net of value added tax or sales ( “Net cannabis revenue”), to be paid in each fiscal quarter as follows:
|
(I) |
3.5% of net cannabis revenue if net cannabis revenue does not exceed $ 25 |
|
(Ii) |
3.0% of net cannabis revenue, where net cannabis revenue exceeds $ 25 million, but |
|
(Iii) |
2.5% of net cannabis revenue, where net cannabis revenue exceeds $ 30 million, but |
|
(Iv) |
2.0% of net cannabis revenue, where net cannabis revenue exceeds $ 37.5 million. |
The royalty is paid for 32 fiscal quarters and is paid for the quarters in which Zenabis meets certain Net Cannabis Rvenue targets and maintains certain debt service rates. If these objectives are not met, the fee is not paid for the applicable tax quarter, but the fee period is extended by another tax quarter.
Sundial has an unrestricted current cash balance of approximately $ 51 million following the investment and approximately 919 million ordinary shares outstanding.
ABOUT SUNDIAL GROWERS INC.
Sundial is a public company with joint shares traded on the Nasdaq under the symbol “SNDL”.
Sundial is an authorized manufacturer that manufactures cannabis using state-of-the-art indoor facilities. Our approach to modular growth “scale crafts”, award-winning genetics and experienced masters differentiates us.
Our Canadian operations grow cannabis in small batches, using an individualized “room” approach, with 448,000 square meters of total space.
The Sundial brand portfolio includes Leaf from above, Sundial Cannabis, Palmetto and MEADOWS. Our experience with packaged consumer goods allows us to grow not only quality cannabis, but also to create exceptional experiences for consumers and customers.
We are proud Albertan, headquartered in Calgary, AB, with operations in Olds, AB and Rocky View County, AB.
Warning statement with anticipatory information
This news release includes statements containing certain “forward-looking information” within the meaning of applicable securities laws (“forward-looking statements”), including, but not limited to, statements about the company’s cash balance, debt position, outstanding shares, anticipated revenue streams and statements on key expected payments, interest and royalties from Zenabis and statements on the Company’s future strategic initiatives. Anticipatory statements are often characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “likely”, “perspective”, “forecast”. ”,“ May ”,“ will ”,“ potential ”,“ proposed ”and other similar words, or statements that certain events or conditions“ may ”or“ will ”occur. These statements are just predictions. Various assumptions have been used to draw conclusions or make the projections contained in the forward-looking statements throughout this press release. Forward-looking statements are based on management’s opinions and estimates at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the future – seeking statements. Please refer to the risk factors identified in the company’s documents with the US Securities and Exchange Commission, including those identified in the company’s Annual Report on Form 20-F, for a discussion of significant risks that could cause actual results to differ. significant compared to the future. -information regarding. The Company has no obligation and expressly waives any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless expressly required by applicable law. .
SOURCE Sundial Growers Inc.
Related links
www.sundialgrowers.com