Zenabis Enters $60 Million Credit Facility To Pay Off Sundial Debt

Zenabis Global (TSX: ZENA) this morning announced that it has entered into a credit agreement with a private debt fund as it works to rid itself of the debt currently held by Sundial Growers (NASDAQ: SNDL). The revolving credit facility, for a total amount of $60.0 million, will be secured based on eligible receivables, inventory, and real estate.

Zenabis’ scramble to get out of its currently outstanding secured debenture follows the $58.9 million of secured debt being acquired by Sundial at the end of December. The company was subsequently issued a notice of default, which Zenabis subsequently publicly blasted Sundial for, with the notice stated to be a means of improperly foreclosing on Zenabis’ assets.

Under the terms of the credit facility, the company is to pay an interest rate to the greater of 10%, and TD Bank’s prime rate plus 7.55%, calculated daily and payable monthly. The debt is for a one year period, having a maturity date of January 21, 2022, while two 180 day extension periods are available as well for an undisclosed fee. Undrawn amounts under the facility are to bear interest at a rate of 2.40% per annum.

The company is also required to pay to the lenders 6.0 million common shares as a partial commitment fee.

Proceeds from the facility, as stated above, will be used to repay the outstanding debenture currently held by Sundial, which bears interest at 14% per annum, as well as for general corporate purposes and to finance working capital requirements.

Zenabis Global last traded at $0.10 on the TSX.


Information for this briefing was found via Sedar and Zenabis Global. 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.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

First Majestic Posts Record Cash Flows In Q1 As Production Costs Fall

Brazil Potash Secures Funding In Support Of US$2.5 Billion Autozales Project

Related News

Sundial Growers Drops Two Tiers At Nasdaq To Avoid Near Term Reverse Split

Sundial Growers (NASDAQ: SNDL) appears to be doing all that it can to avoid being...

Friday, December 11, 2020, 08:46:46 AM

Sundial Growers Increases Total Investment In Sunstream Bancorp To $538.0 Million

Sundial Growers (NASDAQ: SNDL) appears to be looking for avenues to spend its excess cash....

Wednesday, July 7, 2021, 08:00:04 AM

Sundial Sees Credit Facility Waivers Extended By Two Weeks

Sundial Growers (NASDAQ: SNDL) appears to be hanging on by a thread. Last night, on...

Thursday, April 16, 2020, 08:55:24 AM

Zenabis Global Appoints Former President Of McCain Foods, Canada As CEO

Zenabis Global (TSX: ZENA) this morning announced the appointed of a permanent CEO, replacing Kevin...

Monday, July 27, 2020, 08:29:32 AM

Sundial Revenues Fall 36% To $12.9 Million, Reports Loss Of $71.4 Million In Q3

Sundial Growers (NASDAQ: SNDL) this evening reported its third quarter 2020 financial results, posting revenues...

Wednesday, November 11, 2020, 07:25:07 PM