Delta 9 Cannabis DN DLTNF has entered into a binding commitment letter with connectFirst Credit Union Ltd. for $32 million in credit facilities. The proposed credit facilities would be offered to the company through First Calgary Financial, a division of connectFirst.
"With this debt financing, Delta 9 has added financial flexibility to optimize its capital structure and is well positioned to continue to execute its growth strategy," John Arbuthnot, CEO of Delta 9 stated. "This transaction reflects the strong financial and operating results, which Delta 9 and its team have been able to produce in the wake of cannabis legalization in Canada, and confidence from our new senior lender, connectFirst. To our knowledge, this interest rate is among the most competitive rates established by any public cannabis company to date.”
Total Capital and Extended Maturity: The proposed credit facilities include a $23 million commercial mortgage facility, a $5 million acquisition facility, and a $4 million authorized overdraft. Facility 1 matures after 5 years and amortizes over a 12-year term. Facility 1 is anticipated to be established in multiple tranches advancing at various times for purposes including:
- $11.2 million for the repayment of existing long-term debt.
- $11.8 million for the repayment of the company’s 8.5% unsecured convertible debentures due July 17, 2022.
The company expects to repay its $11.8 million of convertible debentures on or before the maturity date of July 17, 2022.
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