CALGARY, AB, 30 December 2020 / PRNewswire / – Sundial Growers Inc. (Nasdaq: SNDL) (“Sundial” or the “Company”) announced today that it has closed the acquisition of a special purpose vehicle (the “investment”). Investment consideration, in total $ 58.9 million cash, was funded from Sundial’s available cash reserves totaling $ 110 million immediately before closing the investment. Unless otherwise stated, all amounts are denominated in Canadian dollars.
The special target vehicle owns $ 58.9 million of total principal amount of senior secured debt (the “Senior Loan”) of Zenabis Investments Ltd. (“Zenabis”), a subsidiary of Zenabis Global Inc. (the “parent”). The senior loan carries interest at a rate of 14% per annum and has a maturity of March 31, 2025, with principal refunds under certain circumstances over time, including $ 7.0 million payable on December 31, 2020. The senior loan is secured by the assets of Zenabis and its subsidiaries and is guaranteed by the parent. In total, the assets represent all the cannabis-related assets of Zenabis.
Under the terms of the Senior Loan, Zenabis will also pay a royalty to Sundial (‘the’ royalty ‘) based on the quarterly income from its medical, recreational and wholesale cannabis lines after deduction of value added tax or turnover tax (‘ net cannabis income ‘). ‘) which is payable each fiscal quarter as follows:
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(i) |
3.5% of net cannabis revenue where the net cannabis revenue does not exceed $ 25 |
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(ii) |
3.0% of net cannabis revenue where net cannabis revenue exceeds $ 25 million but |
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(iii) |
2.5% of net cannabis revenue where net cannabis revenue exceeds $ 30 million but |
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(iv) |
2.0% of net cannabis revenue where net cannabis revenue exceeds $ 37.5 million. |
The royalty is payable for 32 fiscal quarters and is payable for quarters in which Zenabis achieves certain Net Cannabis Rvenue targets and maintains certain debt service ratios. If the targets are not met, the royalty is not payable for the applicable fiscal term, but the term of the royalty is extended by a further fiscal term.
Sundial has a current unlimited cash balance of approximately $ 51 million after the investment and approximately 919 million outstanding ordinary shares.
ABOUT SUNDIAL GROWERS INC.
Sundial is a publicly traded company traded on Nasdaq under the symbol “SNDL”.
Sundial is a licensed producer that manufactures marijuana using modern indoor facilities. Our ‘modular growth approach’ to scale ‘, award-winning genetics and experienced master producers distinguish us.
Our Canadian operations grow small marijuana cannabis according to an individualized “room” approach, with a total area of 448,000 square meters.
Sundial’s brand portfolio includes Upper leaf, Sunshine cannabis, Palmetto and Graslande. Our experience with consumer packaged goods enables us to not only grow quality cannabis, but also to create exceptional consumer and customer experiences.
We are proud Albertan, with its headquarters in Calgary, AB, with operations in Olds, AB, and Rocky View County, AB.
Forward-looking information Warning statement
This news release contains statements containing certain “forward-looking information” within the meaning of applicable security legislation (“forward-looking statements”), including, but not limited to, statements regarding the company’s cash balance, debt position, outstanding shares, expected revenue streams and statements with regarding expected principal, interest and royalty payments from Zenabis and statements regarding the future strategic initiatives of the company. Foresighted statements are often characterized by words such as “plan”, “continue”, “expect”, “project”, “plan”, “believe”, “anticipate”, “estimate”, “likely”, “prospect”, ” prediction “,” power “,” will “,” potential “,” proposed “and other similar words, or statements that certain events or conditions” may “or” will “occur. These statements are predictions only. Various assumptions have been used to draw the conclusions or to make the forecasts in the forward-looking statements in this news release. Forward-looking statements are based on the opinions and estimates of management on the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that may cause actual events or results to differ materially from the forecast. view looking. Consult the risk factors identified in the Company’s filing with the U.S. Securities and Exchange Commission, including those identified in the Company’s Form 20-F Annual Report, for a discussion of the material risks that may result in the actual results may differ materially from scratch. -look information. The Company is under no obligation and expressly disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
SOURCE Sundial Growers Inc.
Related links
www.sundialgrowers.com