Aurora Cannabis Inc. ACB has tapped its at-the-market stock issuance program for a total of $245 million, reaching for $120.6 million since December, according to GLJ Research.
The Aurora Analyst
Gordon Johnson II maintained a Sell rating on Aurora with a zero price target.
Aurora 'Has No More Access To Incremental Funding'
Aurora told GLJ Research Dec. 9 that it had raised total net proceeds of $124.4 million, Johnson said in a Monday note.
In its Feb. 6 press release, the cannabis company said the program has been tapped for a total of $245 million, the analyst said.
Aurora has said a new at-the-market program won't be initiated until April 2021m meaning the company has $154.54 million in at-the-market stock issuance available to it until then, he said.
In the same December discussion, Johnson said GLJ was told the company has around $160 milion of lending capacity from its credit facility with the Bank of Montreal.
In the meantime, the facility’s size was lowered by $141.5 million and the Bank of Montreal has changed the terms of the facility in regards to the debt-to-equity and EBITDA covenants, the analyst said.
" ... It is our belief that ACB has already withdrawn the full US$160mn.
Stated differently, we believe BMO has capped any further lending to ACB, meaning the company has no more access to incremental funding."
GLJ calculated that Aurora has 211.8 days of total liquidity left, suggesting the company may need to file for bankruptcy protection in the third quarter of 2020, he said.
"We feel the equity will end up at our 2021 PT of $0/shr."
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Aurora Price Action
Aurora shares were trading 1.6% higher at $1.58 at the time of publication Tuesday.
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Photo courtesy of Aurora Cannabis.
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