Aurora Cannabis Repays $89M Credit Facility, Continues Its 'Business Transformation Plan'

Canadian cannabis company Aurora Cannabis Inc. ACB ACB confirmed Tuesday it had repaid its $89 million credit facility, without penalty.

The move, which came on the heels of disclosing its plans to raise $300 million by selling its commons shares through the at-the-market offering, results in principal and interest savings of roughly $25 million over the next year.

"We are pleased to have completed our balance sheet restructuring through the full repayment of our credit facility," said Miguel Martin, who was appointed CEO in August.

As of May 31, following repayment and the debit on the Nasdaq Global Select Market, Aurora had about $430 million in pro forma cash to fund its operation and execution of its business plan, Martin explained.

"Further, to maximize our strategic opportunities, including within the U.S., we have an at-the-market equity program to issue and sell up to US$300 million of common shares," he added. Still, the company doesn't intend to access the ATM Program "without an accretive use of proceeds," he added.

Over the past year, Aurora laid off over 1200 employees as part of a "business transformation plan" following the retirement of co-founder and former CEO Terry Booth.

The transformation plan was meant to "reduce the company's expense base, rationalize capital expenditures, and better align its balance sheet with current market conditions."

Martin recently disclosed that Aurora made "tough yet necessary decisions" to bring the company back on the road to profitability.

After a rocky year, the Edmonton, Alberta-based company is still struggling, as evidenced by its latest third-quarter financial report and a 19.5% year-over-year and a 17% sequential drop in revenue, as well as an EBITDA loss of CA$24 million ($19.9 million).

Cantor Fitzgerald's analyst Pablo Zuanic lowered their price target and kept a "Neutral" rating on Aurora's stock.

"Overall, the action in this space is great news, but Aurora does not feel it needs to follow suit to remain competitive," Martin told Benzinga. "That being said, our excellent balance sheet and the recent capital raise put Aurora in a great place to do so, should an opportunity arise." 

Photo by Benjamin Brunner on Unsplash

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Posted In: CannabisEarningsNewsFinancingSmall CapMarketsMiguel Martin
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