TORONTO, Aug. 24, 2017 /CNW/ - Cronos Group Inc.
(TSXV:MJN) (OTC: PRMCF) ("Cronos" or the "Company") is announcing
today that it has entered into a commitment letter for $40 million in debt financing with Romspen
Investment Corporation ("Romspen") to fund the continued
construction of its 315,000 sq. ft. expansion (the "New Peace
Facility") previously outlined in the Company's press release dated
May 23, 2017.
Under the commitment letter, Romspen has agreed to provide the
$40 million senior secured facility
(the "Loan") to the Company's wholly-owned licensed producer, Peace
Naturals Project Inc. ("Peace"). The Loan is secured by a
first mortgage on the real estate of each of Peace and In The Zone
Inc. ("ITZ"). ITZ, Hortican Inc. and the Company are also
guarantors of the Loan. Under the Loan, the Company retains
its ability to enter into equipment financing arrangements.
The Loan will be made available in multiple advances which are
expected to begin in September 2017. Advances will be subject
to ongoing conditions, including Romspen's approval of construction
progress. The Loan bears interest at a rate of 12% per annum
(interest only accrues on advances made), has a 2 year term with a
one-year extension option, and is prepayable on one-month's
notice.
"Given the speed at which we anticipate payback of investment in
the New Peace Facility, we prioritized accessing the debt markets
to fund this domestic expansion. We always look for ways to
enhance shareholder value and we're pleased to be able to work with
Romspen again to deliver that value," said Mike Gorenstein, CEO of Cronos.
Company Grants Options
Additionally, the Company has granted options to subscribe to
2,903,000 common shares of the Company to certain of the Company's
employees and directors, the whole in accordance with the Company's
stock option plan. The options are exercisable at a price of
$2.42 per common share, which was the
closing price of the Company's common shares on the TSX-V on
August 23, 2017. The options shall
expire at the earlier of 180 days of the death, disability or
incapacity of the holder or five years after the date of
issue. The grant of options is subject to the Company
receiving all necessary and appropriate regulatory consents and
approvals, if any, and to the Company's stock option plan.
About Cronos Group
Cronos Group, is a geographically diversified and vertically
integrated cannabis company that operates two wholly-owned Licensed
Producers ("LPs") regulated within Health Canada's Access to
Cannabis for Medical Purposes Regulations (the "ACMPR") and holds a
portfolio of minority investments in other Licensed Producers. The
Company's flagship LPs, Peace Naturals Project Inc. (Ontario), and In The Zone Produce Ltd.
(British Columbia) are
collectively situated on over 125 acres of agricultural, licensed
land. Cronos Group is focused on building an international iconic
brand portfolio, providing patients with compassionate and
personalized care, and creating value for our shareholders.
About Romspen
With its origins in the mid-1960's, Romspen manages one of the
largest non-bank commercial/industrial mortgage investment entities
in Canada, with a portfolio in
excess of $1.7 billion.
Forward-looking statements
This news release may contain "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian securities legislation. All information contained herein
that is not clearly historical in nature may constitute
forward-looking information. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by management, are inherently subject
to significant business, economic and competitive risks,
uncertainties and contingencies that may cause actual financial
results, performance or achievements to be materially different
from the estimated future results, performance or achievements
expressed or implied by those forward-looking statements and the
forward-looking statements are not guarantees of future
performance. Except as required by law, Cronos Group disclaims any
obligation to update or revise any forward-looking statements.
Readers are cautioned not to put undue reliance on these
forward-looking statements. This news release contains information
obtained by Cronos Group from third parties. Cronos Group believes
such information to be accurate but has not independently verified
such information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For more information, please visit www.thecronosgroup.com.
SOURCE Cronos Group Inc.