Zenabis announces $ 60 million committed revolving credit facility to refinance senior debt held by Sundial Growers

VANCOUVER, BC, Jan 22, 2021 / CNW / – Zenabis Global Inc. (TSX: ZENA) (“Zenabis” or the “Company”) is pleased to announce that it has entered into a credit agreement (the “Credit Agreement”) with a Canadian private debt fund (the “Agent”). ”), As agent on behalf of certain lenders, in respect of a committed revolving credit facility in a principal amount of up to $ 60 million, subject to basic borrowing requirements based on on receivables, inventory and qualifying real estate (the “Facility”).

Advances made under the Facility will bear interest at an annual rate equal to the greater of 10% and the prime rate of the Toronto-Dominion Bank from time to time increased by 7.55%, calculated daily and payable monthly. The Facility will have a maturity date of January 21, 2022 and may be extended for up to two additional periods of 180 days each with the mutual agreement of the Company and the Agent. The Facility will be secured by certain real and personal property of Zenabis and its subsidiaries.

The proceeds of the facility will be used to repay the outstanding secured debenture of the Company, which is currently held by an affiliate of Producers of sundials and currently bears interest at a rate of 14% per annum, and for general business purposes, including to finance working capital requirements. This refinancing of the secured debenture will significantly reduce the Company’s interest expense.

Under the terms of the credit agreement, the Company has committed to pay customary financing review and commitment fees. An additional customary commitment fee is payable upon any extension of the term of the facility. Any unused amount of the Facility will incur a non-use charge at the rate of 2.40% per annum. The obligation of lenders to make advances under the Facility, including the initial advance, is subject to the satisfaction of a number of conditions precedent. In addition to the financing terms, the credit agreement contains customary restrictive, negative and financial covenants and customary events of default.

The Company has the right to terminate the Agreement with 30 days’ notice, including in the event of refinancing or change of control, subject to payment of a termination indemnity.

In addition to the cash charges, subject to the approval of the Toronto Stock Exchange (the “TSX”) and the provisions of the Credit Agreement, the Company is obligated to issue to the Agent, on behalf of the Lenders, at the time of the first advance under the Credit Agreement, as a partial commitment fee, 5,972,873 ordinary shares of Zenabis (the “Commitment Shares”). The Commitment Shares will be subject to a holding period of four months plus a date following the date of issue of the Commitment Shares. The issuance of Commitment Shares is subject to TSX approval.

Echelon Capital Markets is acting as the exclusive financial advisor in setting up this credit facility.

We are very happy to announce this new credit agreement with our new financial partners. This committed revolving credit facility will allow the Company to significantly reduce its cost of capital while providing increased liquidity with which to fund Zenabis’ continued revenue growth and increase its operational flexibility.

Shai Altman, CEO of Zenabis

We would also like to take this opportunity to thank Echelon Capital Markets for their assistance in organizing this credit facility.

About Zenabis

Zenabis is a leading Canadian licensed grower of medical and recreational cannabis. Zenabis employs people coast to coast at its facilities in Atholville, New Brunswick; Langley, British Columbia; and Stellarton, Nova Scotia. Zenabis currently owns 111,200 kg of licensed cannabis grow space at three licensed facilities in Canada, as well as its cannabis import, export and processing joint venture, ZenPharm, operating out of Birżebbuġa, Malta. .

Original press release

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