Canopy Growth to exchange holders of $198M of convertible notes

Jun. 30, 2022 9:27 AM ETCanopy Growth Corporation (CGC), WEED:CABy: Khyathi Dalal, SA News Editor11 Comments

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  • Canopy Growth (NASDAQ:CGC) trades 17.7% down premarket after it entered into privately negotiated exchange agreements, through its wholly-owned subsidiary Greenstar Canada Investment, with a limited number of holders including Constellation Brands for its outstanding 4.25% unsecured convertible senior notes due 2023 to acquire ~C$255.4M principal amount of the notes in exchange for shares and ~C$3M in cash for accrued and unpaid interest.
  • GCILP, a subsidiary of CBI, will acquire a minimum of 21.9M canopy shares and up to 30.7M canopy shares post to its exchange agreement.
  • Canopy Growth has agreed to acquire the notes for purchase price of ~C$252.8M which will be payable in such number of Canopy shares.
  • The share consideration for noteholders other than GCILP, will be satisfied by the issuance of Canopy shares in up to two tranches.
  • Currently, GCILP holds C$200M principal amount of notes and post the transaction it will acquire C$100M principal amount of the notes held by GCILP.
  • Constellation, though GCILP and CBG, currently holds 142.25M Canopy shares representing 35.3% of the issued and outstanding shares on a non-diluted basis.

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