HEXO Corp. enters into $65 million bank debt facility
February 15 2019 - 12:12PM
HEXO Corp. (“HEXO” or the “Company”) (TSX:
HEXO;
NYSE-A:
HEXO) is pleased to announce it has
entered into a syndicated credit facility with Canadian Imperial
Bank of Commerce (“
CIBC”), as Sole Bookrunner,
Co-Lead Arranger and Administrative Agent and Bank of Montreal as
Co-Lead Arranger and Syndication Agent (together with CIBC, the
“
Lenders”). Under the terms of the credit
facility, the Lenders will provide HEXO up to C$65 million of
secured debt financing at a rate of interest that is expected to
average in the mid-to-high 5% per annum range over its three-year
term.
The credit facility consists of a C$50
million term loan and a C$15 million revolving loan, with an
uncommitted option to increase the facility by up to C$135 million,
subject to the satisfaction of certain customary legal and business
conditions. Both loans mature in 2022. HEXO may, at its
discretion, repay the balance of the loans without penalty, at any
time.
The proceeds of the term loan will be used to
partially fund the expansion of HEXO’s Gatineau, Québec facility
and leasehold improvements to its newly leased facility in
Belleville, Ontario. The proceeds of the revolving loan will be
used for general corporate purposes and working capital.
The interest rate for the loans is a set margin
over the Canadian dollar prime rate or a bankers’ acceptance of
appropriate term. Based on the current Canadian dollar prime rate,
the interest payable is expected to be in the mid to high 5% per
annum range over the term of the loans.
The credit facility is secured by HEXO and its
subsidiaries, including against HEXO’s facilities in Gatineau,
Québec and Belleville, Ontario, and contains customary financial
and restrictive covenants. Additional details on the credit
facility can be found in the Company’s documents, which will be
filed under the Company’s profile on SEDAR at www.sedar.com.
About HEXO
HEXO Corp. is an award-winning consumer-packaged
goods cannabis company that creates and distributes award-winning
products to serve the global cannabis market. As one of the largest
licensed cannabis companies in Canada, HEXO Corp. operates with
over 1.3 million sq. ft. of facilities in Ontario and Quebec and a
foothold in Greece with plans to establish a Eurozone processing,
production and distribution centre. We serve the Canadian adult-use
market under the HEXO brand while continuing to provide our medical
cannabis clients with consistent access to Hydropothecary medical
cannabis products.
Forward-Looking Statements
This press release contains forward-looking
information and forward-looking statements within the meaning of
applicable securities laws (“forward-looking statements”).
Forward-looking statements are based on certain expectations and
assumptions and are subject to known and unknown risks and
uncertainties and other factors that could cause actual events,
results, performance and achievements to differ materially from
those anticipated in these forward-looking statements.
Forward-looking statements should not be read as guarantees of
future performance or results. A more complete discussion of the
risks and uncertainties facing the Company appears in the Company’s
Annual Information Form and other continuous disclosure filings,
which are available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. The Company disclaims any intention or
obligation, except to the extent required by law, to update or
revise any forward-looking statements as a result of new
information or future events, or for any other reason.
Investor Relations:
Jennifer Smith1-866-438-8429invest@hexo.com
Media Relations:
Sarah Brownmedia@hexo.com
Director:Adam
Miron819-639-5498
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