The Green Organic Dutchman (TSX: TGOD) has closed its previously announced financing for $27.7 million in the form of a 18 month senior secured first lien credit facility. The financing, initially announced on December 13, 2019, follows the $27.6 million bought deal closed by the company last Thursday.
While the facility was increased by $1.0 million when compared to the initial announcement, The Green Organic Dutchman is still representing the overall financing as being $42.7 million in size despite the second portion remaining uncommitted by lender Maynbridge Capital Inc. The uncommitted portion, for up to $15.0 million in the form of a senior secured term loan, is not expected to occur until the start of October 2020 at the very earliest.
The uncommitted portion of the loan is subject to the lender receiving credit approval, and the achievement of undisclosed operating and financial milestones. These milestones appear to be the first hurdle of the potential additional financing, which the company states are not expected to be obtained earlier than “the end of the third quarter of 2020.”
Few details were provided by The Green Organic Dutchman on the expenses related to the financing. The initial news release indicated that the secured loan is subject to an interest rate of 13% per annum, and that the first twelve months would consist of interest-only payments while the final six months would consist of interest and principal payments. It’s unclear if these terms remained the same upon the final signing of the credit facility.
What is clear, however, is that 7,000,000 million common share purchase warrants were issued to Maynbridge upon signing, with an exercise price of $1.00 per warrant, which represents warrant coverage of approximately 25%. The warrants have a term of 36 months.
Proceeds of the secured credit facility are expected to be used for the completion of the Ancaster processing facility as well as general corporate purposes.
The Green Organic Dutchman last traded at $0.67 on the TSX.
Information for this briefing was found via Sedar and The Green Organic Dutchman. 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.
