MediPharm Labs Closes New $38.7 Million Upsized Credit Facility with a Top 5 Canadian Schedule 1 Bank to Support Growth
October 10 2019 - 7:31AM
MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ)
(“MediPharm Labs” or the “Company”) a global leader in specialized,
research-driven cannabis extraction, distillation, purification and
cannabinoid isolation, is pleased to announce its wholly-owned
subsidiary, MediPharm Labs Inc. (“MediPharm”) has closed a credit
agreement (the “Credit Facility”) with a top 5 Canadian Schedule 1
bank (the “Bank”) for an aggregate $38.7 million. The Credit
Facility was upsized from the previously announced committed term
sheet of $20.0 million, and is comprised of a revolving term
facility, a non-revolving term facility and a non-revolving delayed
draw term facility.
“With the successful upsizing of our Credit
Facility and the proceeds from our recent $75 million bought deal
equity offering, we have strengthened our balance sheet and our
ability to execute our global business plan to efficiently seize
the growth opportunities before us,” said Pat McCutcheon, Chief
Executive Officer of MediPharm Labs. “In particular, this enlarged
facility will enhance liquidity and support the delivery of our
stated Canadian and Australian capex strategy, to ramp up of
production capacity to meet contracted and expected demand for our
new product classes.”
The Company’s $38.7 million Credit Facility was
upsized from the previously announced committed term sheet of $20.0
million. The revolving term facility is for up to $25.0 million
subject to the Company’s borrowing base, can be drawn in Canadian
or Australian dollars, has a 1-year term and is to be used for
Canadian and Australian working capital. The $5.7 million
non-revolving term facility was fully drawn on closing, has a
3-year term and was used to refinance and reduce the interest
expense of an existing mortgage. The non-revolving delayed draw
term facility of up to $8.0 million has a 3-year term and is to be
used to fund capital expenditures.
“MediPharm Labs has distinguished itself in the
cannabis industry as a diverse, profitable, risk-managed growth
company,” said Mr. McCutcheon. “The closing of the Credit Facility
required extensive due diligence of our current production site and
capabilities, along with a detailed review of our Company’s
expected revenue growth, liquidity and regulatory compliance. The
Credit Facility will add to our strong balance sheet to assist us
in executing on our business strategy and accelerating our domestic
and international expansion strategies.”
The Credit Facility will bear interest at the
Bank’s prime lending rate plus a certain per cent per annum
dependent upon the Company’s debt to EBITDA ratio. The Credit
Facility has a first ranking general security interest in the
Company’s assets and can be repaid without penalty.
About MediPharm Labs Corp.
Founded in 2015, MediPharm Labs specializes in
the production of purified, pharmaceutical-grade cannabis oil and
concentrates and advanced derivative products utilizing cGMP
(current Good Manufacturing Practices) designed facility and ISO
standard built clean rooms. MediPharm Labs has invested in an
expert, research-driven team, state-of-the-art technology,
downstream purification methodologies and purpose-built facilities
with 5 primary extraction lines having 300,000 KG of annual
processing capacity to deliver pure, safe and precisely-dosed
cannabis products for its customers. Through the Company’s
wholesale, private and white label platform, MediPharm Labs
formulates, processes, packages and distributes active
pharmaceutical ingredients and advanced cannabinoid-based products
to domestic and international markets. As a global leader,
MediPharm Labs has completed commercial exports to Australia and is
nearing completion of its Australian extraction facility expected
in 2019 with 75,000 KG of annual processing capacity.
For further information, please
contact: Laura Lepore, VP, Investor
Relations Telephone: 705-719-7425 ext 216 Email:
investors@medipharmlabs.com Website:
www.medipharmlabs.com
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING INFORMATION:
This news release contains “forward-looking
information” and “forward-looking statements” (collectively,
“forward-looking statements”) within the meaning of the applicable
Canadian securities legislation. All statements, other than
statements of historical fact, are forward-looking statements and
are based on expectations, estimates and projections as at the date
of this news release. Any statement that involves discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often but
not always using phrases such as “expects”, or “does not expect”,
“is expected”, “anticipates” or “does not anticipate”, “plans”,
“budget”, “scheduled”, “forecasts”, “estimates”, “believes” or
“intends” or variations of such words and phrases or stating that
certain actions, events or results “may” or “could”, “would”,
“might” or “will” be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
statements. In this news release, forward-looking statements relate
to, among other things, capital expenditures for the Barrie and
Australian facilities, ramp up of production capacity, expected
demand for new product classes, execution of our business strategy,
accelerating our domestic and international expansion strategies,
the completion of the Australian facility and the processing
capacity of the Australian facility. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable, are subject to known and unknown
risks, uncertainties, and other factors which may cause the actual
results and future events to differ materially from those expressed
or implied by such forward-looking statements. Such factors
include, but are not limited to: general business, economic,
competitive, political and social uncertainties; the inability of
MediPharm Labs to obtain adequate financing; the delay or failure
to receive regulatory approvals; and other factors discussed in
MediPharm Labs’ filings, available on the SEDAR website at
www.sedar.com. There can be no assurance that such statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this news
release. Except as required by law, MediPharm Labs assumes no
obligation to update the forward-looking statements of beliefs,
opinions, projections, or other factors, should they change.
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