Organigram Successfully Completes Amendment to Credit Facilities with Bank of Montreal
May 29 2020 - 6:00AM
Business Wire
Maintains available undrawn capacity of up to
$30 million on term loan and $25 million revolving credit
facility
Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), the parent
company of Organigram Inc. (collectively, the “Company” or
“Organigram”), a leading licensed producer of cannabis, is pleased
to announce that the Company has amended its credit agreement dated
May 31, 2019, with Bank of Montreal (“BMO”) as lead arranger and
agent as well as a syndicate including three other lenders (the
“Credit Agreement Amendment”). The Credit Agreement Amendment
modifies certain terms of the $115 million term loan (the “Term
Loan”) and $25 million revolving credit facility (the “Revolver”,
and together with the Term Loan, the “Facilities”).
The Credit Agreement Amendment: (i) extends the final draw
deadline of the Term Loan to July 31, 2020; (ii) postpones the
commencement of principal repayments on the Term Loan to November
30, 2020; (iii) adjusts certain financial ratios to be maintained
by the Company both before and after November 30, 2021 (the
“Conversion Date”); (iv) modifies the applicable margin pricing and
standby fee terms to reflect current market conditions; and (v)
removes the uncommitted option to increase the Facilities by an
incremental $35 million.
As at the date hereof, Organigram has drawn $85 million of the
Term Loan and pursuant to the agreed upon terms and conditions of
the Facilities can continue to draw down up to $30 million through
to July 31, 2020. Principal repayments on the Term Loan will
commence on November 30, 2020 at a rate of 2.5% per quarter. The
Revolver for general corporate and working capital purposes is
available based on a percentage of trade receivables and is undrawn
as at the date of this press release. The Company may, at its
discretion, repay the balance of the Facilities without penalty, at
any time. Subject to certain exceptions, funds raised by the
Company after December 31, 2020 are required to be used to repay
the Facilities.
The pricing of the Facilities continues to be a set margin,
which before the Conversion Date will be fixed at 2.5% or 3.75%,
over BMO’s Prime Based Loans or a Bankers’ Acceptance or equivalent
rate based on the applicable term, respectively. After the
Conversion Date, the margin may increase or decrease based on a
pricing grid linked to the Company’s senior funded debt to EBITDA
ratio as calculated at each quarter-end. Based on the current
Bankers’ Acceptance benchmark rates and the margin in the pricing
grid, the interest payable is expected to be in the range of 4.4%
to 4.8% per annum.
In addition to the existing customary financial and restrictive
covenants, the Company has agreed as part of the Amendment, to
maintain an unrestricted cash balance of not less than $30 million
at all times, $8 million of which has been deposited as cash
collateral with BMO as security for the Facilities. The Facilities
continue to be secured by the assets of Organigram, which primarily
consist of the Company’s Moncton campus production facility.
The disclosure in this news release relating to the Credit
Agreement and the Amendment is qualified in its entirety by the
full text of such documents, copies of which are or will be filed
on www.sedar.com and www.sec.gov.
About Organigram Holdings Inc.
Organigram Holdings Inc. is a NASDAQ Global Select and TSX
listed company whose wholly owned subsidiary, Organigram Inc., is a
licensed producer of cannabis and cannabis-derived products in
Canada.
Organigram is focused on producing high-quality, indoor-grown
cannabis for patients and adult recreational consumers in Canada,
as well as developing international business partnerships to extend
the Company's global footprint. Organigram has also developed a
portfolio of legal adult use recreational cannabis brands including
The Edison Cannabis Company, Trailer Park Buds, Ankr Organics and
Trailblazer. Organigram's facility is located in Moncton, New
Brunswick and the Company is regulated by the Cannabis Act and the
Cannabis Regulations (Canada).
Forward-looking Information
This news release contains “forward-looking information” and
“forward-looking statements” within the meaning of applicable
securities legislation (collectively, “forward-looking
information”). Often, but not always, forward-looking information
can be identified by the use of words such as “plans”, “expects”,
“estimates”, “intends”, “anticipates”, “believes” or variations of
such words and phrases or state that certain actions, events, or
results “may”, “could”, “would”, “might” or “will” be taken, occur
or be achieved, which includes, without limitation, statements
regarding the Company’s ability to draw additional funds from the
Term Loan and the expected interest rate payable.
Forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results,
events, performance or achievements of Organigram to differ
materially from current expectations or future results, performance
or achievements expressed or implied by the forward-looking
information contained in this news release. Risks, uncertainties
and other factors involved with forward-looking information could
cause actual events, results, performance, prospects and
opportunities to differ materially from those expressed or implied
by such forward-looking information include factors that could
change the availability of the Facilities from time to time and the
applicable terms thereof including market and credit conditions,
general risks related to COVID-19 and risks as disclosed in the
Company’s most recent annual information form, management’s
discussion and analysis and other Company documents filed from time
to time on SEDAR (see www.sedar.com), or the Company’s annual
report on Form 40-F and its reports on Form 6-K filed or furnished
to the Securities and Exchange Commission (the “SEC”) on EDGAR (see
www.sec.gov), and such other continuous disclosure materials as may
be filed from time to time by the Company with Canadian securities
regulatory authorities and the SEC. Although the Company believes
that the assumptions and factors used in preparing the
forward-looking information in this news release are reasonable,
undue reliance should not be placed on such information and no
assurance can be given that such events will occur in the disclosed
time frames or at all. The forward-looking information included in
this news release are made as of the date of this news release and
the Company disclaims any intention or obligation, except to the
extent required by law, to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20200529005146/en/
For Investor Relations enquiries, please contact: Amy Schwalm
Vice President, Investor Relations Amy.Schwalm@organigram.ca (416)
704-9057 For Media enquiries, please contact: Ray Gracewood Senior
Vice President, Marketing and Communications
rgracewood@organigram.ca (506) 645-1653
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