Hexo Corp (TSX: HEXO) (NYSE: HEXO) has sold its Niagara, Ontario facility. The company announced the sale of this asset this evening, identifying that land, greenhouse facilities, and certain equipment was involved in the sale.
Collectively, the facility and its related assets sold for a total of $10.25 million in gross proceeds, with the sale being final as of June 15, 2020. The sale follows the announcement from close to three months ago of the asset going up for sale as the company looks to right-size its operations and reduce its cultivation assets in the face of lower than expected demand.
It’s unclear specifically the size of the loss that Hexo has taken as a result of the asset sale. The property was acquired as a part of the Newstrike Brands acquisition that closed approximately one year ago. The total value of the acquisition was marked at $263 million, with property, plant and equipment being valued at $46 million at the time of closing. It’s not clear what value was ascribed specifically to the Niagara facility.
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The company has indicated that proceeds from the asset sale will be used to fund additional expansion at its Belleville, Ontario facility, as well as working capital and general corporate purposes.
Hexo Corp last traded at $0.82 on the NYSE.
Information for this briefing was found via Sedar and Hexo Corp. 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.
