It appears that despite significant cash holdings, Sundial Growers (NASDAQ: SNDL) remains committed to the Canadian cannabis market rather than that of the US cannabis market. The company this morning announced a $22.0 million strategic investment into that of Indiva Limited (TSXV: NDVA).
The arrangement will see Sundial acquire 25.0 million common shares of Indiva at a price of $0.44 per share, raising gross proceeds of $11.0 million for the cannabis edibles producer under a private placement. The company will then provide a non-revolving term loan facility for a further $11.0 million.
Net of fees and other expenses, Indiva is expected to receive net proceeds of $20.9 million from the transactions. Proceeds are to be used to retire outstanding debt in full, including a demand loan and promissory note, as well as for working capital and other general corporate purposes. The company further indicated that it will use the funds to implement further automation at its production facility.
The transaction is expected to close by February 23, 2021. Upon closing, Sundial will own a 18.45% stake in Indiva Limited.
Sundial Growers last traded at $2.08 on the Nasdaq.
Information for this briefing was found via Sedar and the companies mentioned. 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.
One Response
Will Indiva stock decrease or increase when another company owns a stake in their company? New to stocks here..