Aurora Cannabis Inc. ACB ACB has repurchased an aggregate of roughly CA$12.3 million ($9 million) principal amount of its convertible senior notes in multiple transactions between August 16 and September 8, 2023.
What Happened
A total cash cost of CA$12.3 million, including accrued interest, was satisfied by issuing an aggregate of approximately 20.1 million common shares of Aurora, the Edmonton, Alberta-based company said on Friday.
The news comes on the heels of the Department of Health and Human Services’ call to the DEA to reclassify cannabis from a Schedule I to III under the Controlled Substances Act.
Why It Matters
The Canadian cannabis giant said that the transactions will reduce its debt and annual cash interest costs while helping it achieve positive free cash flow in 2024.
Additionally, the move would save Aurora CA$660 000 in annualized interest payments.
Aurora has repurchased an aggregate of approximately CA$ 419 million principal amount of its convertible senior notes since December 2021, resulting in total cash interest savings of roughly CA$31.7 million.
"With one of the strongest balance sheets of the Canadian LPs evidenced by our net cash position and continued commitment to prudent fiscal management, we are confident in our ability to achieve our target of positive free cash flow within the calendar year 2024," said Miguel Martin, Aurora CEO.
Martin, who was a featured speaker at April's Benzinga cannabis event in Miami, became Aurora's CEO in 2020. At the time, the company was reporting a net loss of CA$3.3 billion for its fiscal 2020. The only positive light at the end of the tunnel was the company's "transformation" plan that then-interim CEO Michael Singer undertook.
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What's Next
Following the completion of these repurchases, Aurora will have approximately CA$53 million of notes outstanding.
"As of today, Aurora has reduced its convertible debt from US$345 million to below US$39 million," Martin added.
ACB Price Action
Aurora's shares traded 4.65% higher at $0.5536 per share during the pre-market session on Monday morning.
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The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.
Photo: Courtesy of geralt and Kindel Media by Pixabay
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