MONCTON, NB, Feb. 27, 2019 /CNW/ - Organigram Holdings Inc.
(TSX VENTURE: OGI) (OTCQX: OGRMF), announced today that the Company
has elected to exercise its right under the indenture (the
"Indenture") governing the Company's 6.0% convertible unsecured
debentures due January 31, 2020 (the
"Debentures") to convert (the "Conversion") all of the principal
amount outstanding of the remaining Debentures on April 1, 2019 (the "Conversion Date") into common
shares of the Company (the "Common Shares").
Pursuant to the terms of the Indenture, the Company may force
the conversion of the Debentures at the conversion price of
$5.42 per Common Share when the
volume weighted average trading price ("VWAP") of the Common Shares
on the TSX Venture Exchange (the "Exchange") for 10 consecutive
trading days exceeds $7.05.
As of close of markets February 26,
2019, the VWAP of the Common Shares on the Exchange for 10
consecutive trading days exceeded $7.05. The Conversion is scheduled to be
effective on or around April 1, 2019.
Therefore, on April 1, 2019, the
estimated remaining total of approximately $98,024,000 (face value) of Debentures
outstanding will be converted into approximately 18,085,608 Common
Shares, and accrued interest (less any required deductions or
withholdings) will be paid. The Corporation will not issue
fractional Common Shares on the Conversion. Instead, the
Corporation shall, in lieu of delivering a certificate representing
such fractional interest, make a cash payment to the holder of an
amount equal to the fractional interest in accordance with the
Indenture.
The Company has provided the holders of the Debentures at least
30 days advance written notice of the Conversion.
Holders of the Debentures can voluntarily convert their
Debentures in accordance with the terms of the Indenture prior to
the Conversion Date. The Company estimates that the
Conversion will save approximately $4.9
million in cash interest payments that would have otherwise
been payable if the outstanding Debentures were held to
maturity. The Conversion will also eliminate a significant
liability from the Company's balance sheet.
About Organigram Holdings Inc.
Organigram Holdings Inc. is a TSX Venture Exchange 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 the highest-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, Ankr Organics, Trailer Park Buds and Trailblazer.
Organigram's primary facility is located in Moncton, New Brunswick and the Company is
regulated by the Cannabis Act and the Cannabis
Regulations (Canada).
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
This news release contains forward-looking information which
involves known and unknown risks, uncertainties and other factors
that may cause actual events to differ materially from current
expectations. Important factors, including the value of outstanding
debentures as at the Conversion Date, could cause actual results to
differ materially from the Company's expectations are disclosed in
the Company's documents filed from time to time on SEDAR (see
www.sedar.com). 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, whether as a result of new
information, future events or otherwise. We seek safe harbor.
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SOURCE OrganiGram