Aurora Cannabis Inc (TSXV:ACB) has finalized a deal with Canaccord Genuity Corp., on behalf of the “Underwriters”, pursuant to which the latter have agreed to buy, on a bought agreement, private placement basis, dependent on adjustment following the Underwriters’ Option, $40 million worth convertible debentures priced at $1,000 per Convertible Debenture.
Aurora has presented the Underwriters with an option to buy up to an additional $20 million total principal amount of the “Debentures” on the same terms as that of the Convertible Debentures under the Offering. If the underwriters exercise their option in full, the total gross proceeds will be $60 million. Moreover, certain holders have accepted to convert outstanding convertible debentures worth $17.5 million, bearing interest at 8% annually, into almost 8.75 million additional common shares.
The Debentures will have interest from the closing date at 7% per annum, to be paid semi-annually. They will have a maturity date of two years from the “Maturity Date”. Net proceeds will be used mainly towards growth opportunities and international expansion.
Terry Booth, the CEO of Aurora, reported that this lower cost financing brings company in an enormously powerful position to pursue global expansion opportunities, with what they consider will be the impressive cash balance, at over $150 million, in the international cannabis sector.
With their current facility in Mountain View County, construction proceeding speedily on Aurora Sky and the recent deal of Peloton Pharmaceuticals, they are also advancing what they project will be the leading cannabis production capacity across the globe, developed to the Aurora Standard. Together with their technological innovation and e-commerce strategy, the company is ideally placed to play an important role in the Canadian consumer and medical cannabis markets, as well in other growing global cannabis markets.
The Debentures can be converted at the discretion of the holder into “Common Shares” at a conversion price of $3.29.