CALGARY, AB, December 30, 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”). Consideration for investment, total $ 58.9 million in cash, it was funded from Sundial’s available cash reserves that added up $ 110 million immediately prior to the closing of the investment. All amounts are denominated in Canadian dollars unless otherwise indicated.
The vehicle for special uses is owned $ 58.9 million of the aggregate principal amount of senior secured debt (the “senior loan”) from Zenabis Investments Ltd. (“Zenabis”), a subsidiary of Zenabis Global Inc. (the “matrix”). The senior loan has interest at a rate of 14% per annum and has a maturity date of March 31, 2025, with capital amortizations in certain circumstances over time, including $ 7.0 million turn off December 31st, 2020. The senior loan is secured by the assets of Zenabis and its subsidiaries and is secured by the parent company. Taken together, the assets represent all the assets related to Zenabis cannabis.
Under the terms of the senior loan, Zenabis will also pay Sundial a fee (the “fee”) based on quarterly sales revenue from its medical, recreational and wholesale cannabis lines net of value added tax or sales (“Net Cannabis Revenue”), which will be paid each fiscal quarter as follows:
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(i) |
3.5% of net cannabis revenue when net cannabis revenue does not exceed $ 25 |
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(ii) |
3.0% of net cannabis revenue, when net cannabis revenue exceeds $ 25 million, but |
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(iii) |
2.5% of net cannabis revenue, when 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 fee is paid for 32 tax quarters and is paid for quarters in which Zenabis meets certain net goals of Cannabis Rvenue and maintains certain debt service ratios. If these goals are not met, the royalty will not be paid for the applicable fiscal quarter, but the royalty term is extended for another fiscal quarter.
The sundial has an unrestricted current cash balance of approx $ 51 million after the investment and approximately 919 million ordinary shares outstanding.
ABOUT SUNDIAL GROWERS INC.
Sundial is a public company with ordinary shares traded on the Nasdaq with the symbol “SNDL”.
Sundial is a licensed producer that manufactures cannabis with state-of-the-art indoor facilities. Our “artisanal scale” approach to modular growth, award-winning genetics and experienced master producers differentiate us.
Our Canadian operations grow small batch cannabis using an individualized “room” approach, with 448,000 square feet of total space.
Sundial’s brand portfolio includes Upper leaf, Cannabis sundial, Palmetto i Prats. Our experience in consumer-packaged products allows us to not only grow quality cannabis, but also create exceptional experiences for consumers and customers.
We are proud of Albertan, based in Calgary, AB, with operations in Olds, AB, and Rocky View County, AB.
Cautionary statement of prospective information
This statement includes statements that contain certain “forward-looking information” within the meaning of applicable securities legislation (“forward-looking statements”), including, but not limited to, statements relating to cash balance, debt position, outstanding actions of the company revenue streams and statements about planned payments of principal, interest and royalties from Zenabis and statements about the company’s future strategic initiatives. Prospective statements are often characterized by words such as “plan”, “continue”, “wait”, “project”, “pretend”, “believe”, “anticipate”, “love”, “likely”, “perspective”, ” forecast “,” may “,” is “,” potential “,” proposed “and other similar words, or statements that certain events or conditions” may “or” will occur “. These statements are only predictions. Throughout this press release, various assumptions were used to draw conclusions or make the projections contained in the forward-looking statements. 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 may cause actual events or results to differ materially from those projected in the future. looking at affirmations. Consult the risk factors identified in the company’s applications to the U.S. Securities and Exchange Commission, including those identified in the company’s annual report on Form 20-F, to analyze the material risks they could pose. that actual results differ significantly from future -See 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 anything else, except as expressly required by applicable law.
SOURCES Sundial Growers Inc.
Related links
www.sundialgrowers.com