It appears that Village Farms (TSX: VFF) (NASDAQ: VFF) is taking a step back from the battle it began with Emerald Therapeutics (TSXV: EMH) back in November 2019. The company announced this morning that it had opted to see its $5.94 million returned that it advanced in November as it attempted to stake a majority claim in the Pure Sunfarms joint venture.
Emerald Health has been clear since the start that it disputes the claim that Village Farms has made related to its ability to increase its ownership in the firm. The debacle first began when Emerald failed to abide by a default notice related to a required cash payment due on November 1, 2019. Village Farms subsequently stepped in, and attempted to claim the increased equity portion associated with the payment by making the $5.94 million payment themselves.
Despite Village Farms now opting to have the cash payment returned as a gesture of goodwill with that of Emerald Health, all has not settled in the dispute. Village Farms is still seeking to have Emerald Health’s equity portion drop to 46.5% effectively as a result of the missed payment. The difference however, is that Village will see its ownership increase marginally to 53.5%, versus a potentially larger split had the company not asked for the funds to be returned.
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Village Farms justified the action of asking for the return of the funds by calling it, “an effort to narrow the issues in dispute and accelerate the resolution of this shareholder dispute.” The move is also anticipated to reduce the delay in resolution as well as associated costs, as an appraisal will no longer be required on the Pure Sunfarms property.
A final decision on the matter is anticipated in the second half of 2020.
Village Farms last traded at $6.22 on the Nasdaq.
Information for this briefing was found via Sedar, Emerald Health Therapeutics, and Village Farms International. 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.
