Aphria Inc (TSX: APHA) (NYSE: APHA) this morning announced that it has entered into an agreement with certain convertible debt holders to repurchase outstanding debt at a significant discount to the face value of that debt. What’s more, is that the majority of the debt repurchase is being settled via the issuance of common shares with a small cash component involved.
In total, Aphria will be repurchasing C$127.5 million ($90.8 million US) of its outstanding debt issued in April 2019. At the time, a total of US$350 million was issued, with a maturity of 5 years and an interest rate of 5.25%. The shares were to convert at a price of US$9.38, with the company stated to be ineligible to redeem the debt before June 6, 2022. That has now clearly changed however, with the company agreeing to issue 18.7 million to settle 25.9% of the overall debt. Cash consideration of C$2.9 million ($2.1 million US) will also be issued to pay for accrued and unpaid interest.
The company described the exchange as receiving a 25% discount on the face value of the loans, while issuing shares at a 31% premium to the current share price, with the shares having a stated conversion price of US$4.84 per share.
Aphria is believed to now have outstanding convertible debentures of US$259.2 million in principal. The debt reduction follows the news earlier this week that the firm had also settled its outstanding $39.0 million receivable from GA Opportunities Corp.
The company closed yesterdays session at US$3.69 on the NYSE.
Information for this briefing was found via Sedar and Aphria Inc. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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