Fire & Flower Converts $52.1 Million In Debt To Equity
Fire & Flower Holdings (TSX: FAF) this morning announced that it is cleaning up its balance sheet. The company has managed to convert a notable $52 million in debt sitting on its balance sheet to that of equity, placing the company in a much stronger financial position.
The first debt to be converted is $28.5 million in outstanding principal issued in April 2020. The debt, which contains an interest rate of 8.0% and is secured against assets of the company, was able to be converted as a function of the strengthen seen in the equity price as of late and the forced conversion clause attached to the debt.
With the equity trading over $1.25 for a period of ten days on a volume weighted basis, the company informed debtholders that the debt would be converted to equity. A total of 59.2 million shares are to be issued on March 3 in connection with the forced conversion of debt.
Following this conversion, the firm will then convert $23.6 million in principal amount of 8.0% unsecured debentures that were originally issued to a subsidiary of Alimentation Couche-Tard in 2019. This conversion is possible as a result of $20.0 million in debt being removed from the firms books, as well as the price of the equity trading over $1.00 on a volume weighted basis for a a twenty day period. Following the conversion, Alimentation will have a 19.9% equity stake in the firm, after the issuance of 31.9 million shares for the debt.
The conversions are to be completed by March 10, 2021.
Fire & Flower Holdings last traded at $1.38 on the TSX.
Information for this briefing was found via Sedar and Fire and Flower Holdings. 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.
