Aurora Cannabis (TSX: ACB) (NYSE: ACB) continues to liquidate its assets as it tries to generate cash to feed the machine, with the announcement this morning that it is exiting its investment in Alcanna (TSX: CLIQ). The companies jointly announced this morning that a bought deal was being conducted as a means for Aurora to drop its holdings in the retailer.
The sale of Aurora’s 23% stake in Alcanna is occurring on a bought deal via a short form prospectus lead by Cormark Securities. The offering will see Aurora dump all 9.2 million shares it currently owns of Alcanna at a price of $3.00 per share – a massive loss when compared to the $15.00 per share price tag the company paid for the position two years ago in 2018.
Total gross proceeds from the financing is pegged at $27.6 million for Aurora – an 80% loss on investment. To clarify, all funds from the sale will be given to Aurora Cannabis, with Alcanna not receiving anything from the financing. The event is simply a means for Aurora to dump its position in an orderly fashion, without destroying current shareholders of Alcanna.
Alcanna inc last traded at $3.19 on the TSX. The company currently operates 231 liquor stores across Alberta and BC, along with 31 cannabis stores under the Nova Cannabis banner.
Information for this briefing was found via Sedar, Aurora Cannabis and Alcanna. The author has no securities or 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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.