Village Farms (TSX: VFF) (NASDAQ: VFF) announced this morning that its equity increase in Pure Sunfarms has been accepted by the joint venture, despite previous claims made by Emerald Health Therapeutics (TSXV: EMH). The ongoing saga between the two partners will see Village Farms take a larger share in the previously equally owned joint venture.
While Village Farms now has majority ownership in the venture, it is still unclear to what extent that majority ownership is. Following the approval from Pure Sunfarms of the increased equity ownership, an appraisal needs to be conducted on the venture to determine the value of assets. That appraisal is set to occur in February 2020, with additional common shares in the venture to be applied to Village Farms position effective November 19, 2019.
Village Farms also identified that Pure Sunfarms confirmed that their interpretation of the shareholder agreement between Village and Emerald was correct as per the joint entity, and that Emerald Health’s press release dated November 20, 2019 was incorrect and based on a material misunderstanding.
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Village Farms stake in Pure Sunfarms is set to increase after the firm forwarded an additional equity contribution of $5.94 million, following Emerald’s failure to make a payment on November 1, 2019. Village Farms is also seeking to have 5.94 million common shares of Pure Sunfarms currently held in escrow for Emerald Health to be cancelled as well as a result of the failure to make the payment, which would further increase Village Farms’ majority stake in the venture.
Village Farms last traded at $8.36 on the TSX.
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.
