CALGARY, AB, December 30, 2020 / PRNewswire / – Sundial Growers Inc. (Nasdaq: SNDL) (“Sundial” or the “Company”) today announced that it has completed the purchase of a special purpose vehicle (the “Investment”). Consideration for the investment, in total $ 58.9 million in cash, was funded from Sundial’s available cash reserves, which in total $ 110 million immediately prior to the closing of the investment. All amounts are expressed in Canadian dollars unless otherwise stated.
Own the special purpose vehicle $ 58.9 million of the aggregate principal amount of senior secured debt (the “Senior Loan”) of Zenabis Investments Ltd. (“Zenabis”), a subsidiary of Zenabis Global Inc. (the “Parent Company”). The Senior Loan has an interest rate of 14% per annum and has an expiration date of March 31, 2025, with principal redemption under certain circumstances over time, including $ 7.0 million to pay on December 31, 2020. The senior loan is backed by the assets of Zenabis and its subsidiaries and is guaranteed by the parent company. In total, the assets represent all of Zenabis’s cannabis-related assets.
Under the terms of the senior loan, Zenabis will also pay a royalty (the “ royalty ”) to Sundial based on the quarterly earnings from its medical, recreational and wholesale cannabis lines net of value added or sales taxes (“ net cannabis income ”) , which will be paid each fiscal quarter as follows:
|
(I) |
3.5% of net income from cannabis where net income from cannabis does not exceed $ 25 |
|
(ii) |
3.0% of net income from cannabis where net income from cannabis exceeds $ 25 million, but |
|
(iii) |
2.5% of net cannabis income where net cannabis income exceeds $ 30 million, but |
|
(iv) |
2.0% of net cannabis income where net cannabis income 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 goals and maintains certain debt service ratios. If these targets are not met, the royalty is not payable for the applicable fiscal quarter, but the term of the royalty is extended for another fiscal quarter.
Sundial currently has an unlimited cash balance of approx $ 51 million after the investment and approximately 919 million common shares outstanding.
ABOUT SUNDIAL GROWERS INC.
Sundial is a limited liability company with common stock traded on Nasdaq under the symbol “SNDL”.
Sundial is a licensed producer that manufactures cannabis using state-of-the-art indoor facilities. Our ‘artisan’ modular cultivation approach, award-winning genetics and experienced master growers set us apart.
Our Canadian operations grow cannabis in small batches using an individualized “room” approach, covering a total area of 448,000 square feet.
Sundial’s brand portfolio includes Top sheet, Sundial Cannabis, Palmetto and Grassland. Our experience with consumer packaged goods allows us to not only grow high-quality cannabis, but also create exceptional consumer and customer experiences.
We are proud Albertan, headquartered in Calgary, AB, with offices in Olds, AB, and Rocky View County, AB.
Warning about forward-looking information
This press release contains statements that contain certain “forward-looking information” within the meaning of applicable securities laws (“forward-looking statements”), including, but not limited to, statements regarding the company’s cash balance, debt position, expected share income streams outstanding and statements with respect to expected payments of principal, interest and royalties from Zenabis and statements regarding the future strategic initiatives of the company. Forward-looking statements are often characterized by words such as “plan”, “proceed”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “likely”, “outlook”, “predict”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Various assumptions have been used in drawing the conclusions or making the projections in the forward-looking statements contained in this press release. Forward-looking statements are based on management’s opinions and estimates at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those in the future. are predicted. looking statements. See the risk factors identified in the Company’s filings with the U.S. Securities and Exchange Commission, including those identified in the Company’s Annual Report on Form 20-F, for a discussion of the material risks that could cause actual results differ materially from future information. The company has no obligation, and expressly disclaims any intention or obligation to update or revise any 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