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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
