Cronos Group Inc. Enters into Credit Agreement with Cronos Growing Company Inc.
August 23 2019 - 4:30PM
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“
Cronos
Group” or the “
Company”) has entered into
a credit agreement (the “
Credit Agreement”), as
administrative agent and lender, with Cronos Growing Company Inc.
(“
Cronos GrowCo” or “
GrowCo”), as
borrower, in respect of a $100 million secured non-revolving term
loan credit facility (the “
Credit Facility”).
Cronos GrowCo, a 50/50 joint venture owned by Cronos Group and a
group of investors led by Bert Mucci (the “Greenhouse
Partners”), intends to use the funds available under the
Credit Facility to fund the construction of the previously
announced custom-built greenhouse (the “Facility”)
and for general operating purposes. Completion of construction of
the Facility is subject to obtaining the relevant building and
occupancy permits and other customary approvals. Commencement of
operations at Cronos GrowCo will be subject to obtaining the
appropriate licenses under applicable law.
The Credit Facility will mature on March 31, 2031 and will bear
interest at varying rates based on the Canadian prime rate.
Interest will begin to accrue as of the closing date and will be
payable on a quarterly basis until maturity, except that any
interest accrued prior to March 31, 2021 will be payable not later
than December 31, 2021. The Credit Facility is secured by
substantially all present and after acquired property of GrowCo and
its subsidiaries. The Greenhouse Partners have also provided a
limited recourse guarantee in favour of the Company, secured by the
Greenhouse Partners’ shares in GrowCo.
The Credit Agreement contains customary representations and
warranties and operating covenants. Advances under the Credit
Facility are subject to customary conditions.
“We regularly evaluate our supply chain opportunities, including
those within our asset footprint to ensure we are driving the
greatest returns and best positioning Cronos Group for long-term
success. As part of this work, we have decided to provide the debt
funding for the GrowCo joint venture,” said Jerry Barbato, CFO of
Cronos Group. “The management team at GrowCo have been great
partners, and we value the expertise they continue to bring to this
project.”
About Cronos Group
Cronos Group is an innovative global cannabinoid company with
international production and distribution across five continents.
Cronos Group is committed to building disruptive intellectual
property by advancing cannabis research, technology and product
development. With a passion to responsibly elevate the consumer
experience, Cronos Group is building an iconic brand portfolio.
Cronos Group’s portfolio includes PEACE NATURALS™, a global health
and wellness platform, and two adult-use brands COVE™ and Spinach™.
To learn more about Cronos Group and its brands, please
visit: www.thecronosgroup.com; www.peacenaturals.com;
www.covecannabis.ca; www.spinachcannabis.com.
Forward-looking Statements
This news release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian and U.S. securities laws. All information contained herein
that is not clearly historical in nature may constitute
forward-looking information. In some cases, forward-looking
statements can be identified by words or phrases such as "may",
"will", "expect", "plan", "anticipate", "intend", "potential",
"estimate", "believe" or the negative of these terms, or other
similar expressions intended to identify forward-looking
statements. Some of the forward-looking statements contained in
this press release include Cronos GrowCo’s intention to use funds
available under the Credit Facility to fund construction of the
Facility and for general operating purposes, Cronos GrowCo’s
ability to complete construction, the receipt of building and
occupancy permits and licenses under applicable law to commence
operations, the ability of Cronos GrowCo to make payments of
interest or principal under the Credit Facility, and the Company’s
intention to build an international iconic brand portfolio and
develop disruptive intellectual property. 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 or 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. A discussion of some of the material risks
applicable to the Company and the Investment can be found in the
Company's current MD&A and Annual Information Form and the
Circular, all of which have been filed on SEDAR and EDGAR and can
be accessed at www.sedar.com and www.sec.gov/edgar. The
forward-looking information included in this news release is made
as of the date of this news release and 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.
All references to “$” are to Canadian dollars.
For information please contact:Anna
ShlimakInvestor RelationsTel: (416)
504-0004investor.relations@thecronosgroup.com
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