Sundial Growers (NASDAQ: SNDL) announced this morning that it had secured $140 million in additional financing through a syndicated credit agreement between ATB Financial and that of the Bank of Montreal.
With a repayment term of two years, the first initial draw down will consist of a total of $90 million. $84 million of this drawdown will consist of a senior secured term credit facility, while the remaining $6 million will come in the form of a senior secured revolving operating facility. Sundial also has access to an additional facility of $50 million, to be used for the construction of its Canadian production facilities should the money be required.
While no interest rate was provided in the news release, Sundial Growers has a history of working with ATB Financial in the past. On February 22, the firm signed a $30 million non-revolving term loan facility with the group, which had an interest rate of 9.0% and was due on May 15, 2019. As of the latest interim filings, Sundial notably had yet to pay off this loan. Sundial also is believed to have had a loan agreement with ATB Financial, to the tune of $10 million which was originally due at the end of September. The loan agreement had an interest rate of 9.5%. Thus, it can be reasonably assumed that the loan will consist of an interest rate within this defined range.
A total of $48 million from the initial facility was drawn and used to repay ATB Financial for Sundial’s previous amounts owing immediately after signing. The new debt is secured by all Canadian assets that Sundial owns, including production facilities.
This $140 million financing adds to the amount of funding that the cash-intensive operation of Sundial has gained access to over the last nine months. In total, Sundial Growers has obtained approximately $436 million in funding over the nine month period.
As of last reporting, the firm had $38.4 million remaining in the till as it works towards completing multiple production facilities across Canada.
Information for this briefing was found via Sedar and Sundial Growers Inc. 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.
