Canopy Growth To Settle $255.4 Million Of Senior Notes Via Share Issuance

Canopy growth (TSX: WEED) appears to be doing what it can to eliminate its debt obligations before they come due. The firm last night announced an arrangement, whereby a significant portion of outstanding unsecured convertible senior notes are to be settled for shares of the company.

The arrangement will see C$255.4 million of the firms 4.25% senior notes due 2023 acquired from noteholders. The debt is to be acquired in exchange for common shares of the company, with roughly $3.0 million in cash to be used as well to settle unpaid interest due.

Consideration to be paid is to consist of $252.8 million, excluding interest. Payment is to be settled in shares based on the volume weighted average price of the equity on the Nasdaq for a period of ten trading days beginning June 30, 2022. The conversion has a floor price of US$2.50 per share, and a ceiling of US$3.50 per share.

The first payment of shares is to occur June 30, and will consist of roughly 34.1 million shares, with the remainder to be settled July 18.

Constellation Brands (NYSE: STZ), a major holder of Canopy, will see half of its $200 million in notes included in the arrangement. The company as a result will see its holdings in the company increase from 5.4% to 7.6% based on the conversion price of the debt. Prior to the transaction, the company held a 35.3% stake in Canopy.

Notably, as part of the arrangement, the company has waived the ability to settle any of the remaining notes in the form of shares. Notes not included in the conversion arrangement announced last night as a result will now be settled in cash.

The remaining notes will come due July 15, 2023. With $600 million in notes initially issued in 2018, the company is estimated to have a remaining $344.6 million in principal owing on the notes following the arrangement. The company last reported a cash position of $776.0 million, along with short-term investments of $595.7 million.

Canopy Growth last traded at $4.49 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.

Video Articles

Baselode Energy To Acquire Forum Energy: The Merger Of Equals Deal

TriStar Gold: The Revised Castelo de Sonhos Prefeasibility Study

Gold is Up 30%, But the Real Bull Market is Only Starting Now! | Adrian Day

Recommended

ESGold To Expand Mine Building At Montauban In Advance Of Gold & Silver Production

Goliath Resources Expands 2025 Drill Program To 60,000 Metres

Related News

Canopy Growth Announces Five New Ontario Retail Locations

Canopy Growth Corp (TSX: WEED) (NYSE: CGC) is increasing its focus on retail operations across...

Monday, January 6, 2020, 08:48:06 AM

Canopy Growth Sees Constellation Brands Exercise $245 Million In Warrants

Constellation Brands (NYSE: STZ) has exercised the much anticipated warrants it holds in Canopy Growth...

Friday, May 1, 2020, 07:01:19 PM

Canopy Growth: Klein’s Annual Compensation Includes Base Salary of US$975k

This week, Canopy Growth Corp (TSX: WEED) (NYSE: CGC) filed for the first time a...

Tuesday, June 2, 2020, 05:07:15 PM

Canopy Growth Sees Consensus Estimates Point To Q1 2023 Revenues Of C$113 Million

Canopy Growth (TSX: WEED will be reporting its fiscal first quarter financial results tomorrow before...

Thursday, August 4, 2022, 11:38:00 AM

Canopy Growth Increases Effective Ownership Of TerrAscend To 26.8%

Canopy Growth (TSX: WEED) (NASDAQ: CGC) appears to have a particular affinity for that of...

Thursday, January 14, 2021, 08:18:37 AM