Canopy Growth Corp (TSX: WEED) has closed on its previously announced transactions to settle certain outstanding debt ahead of a maturity next year. The settlement reduced debt obligations by a total of $263 million.
The debt being settled related to its 4.25% unsecured notes due in 2023. With $600 million worth of the notes initially issued in 2018, the settlement equates to nearly half of the originally issued debt.
Outside of $5.4 million paid in cash related to interest on the debt, the firm managed to cancel $263 million in debt via the issuance of $260 million worth of common shares. Shares were issued at the following prices:
- 35,662,420 shares issued at US$3.50 on the initial closing
- 11,896,536 shares issued at US$2.62 on final closing
- 29,245,456 shares issued at US$2.62 on final closing to a subsidiary of Constellation Brands
The conversion prices of the debt is significant, given that under the original terms of the unsecured note, debt was convertible at a price of $48.18 per share. The share issuances also resulted in Constellation Brands increasing its ownership by 6.7% to 35.7%.
The remainder of the debt is set to mature July 15, 2023.
“We continue to assess all available options to further optimize our balance sheet and address the remaining 4.25% unsecured notes in advance of their maturity to ensure Canopy Growth is well positioned to continue investing in the highest potential areas of our business to drive future growth,” commented CFO Judy Hong.
Canopy Growth last traded at $3.36 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
