Canopy Growth signs agreements to reduce debt amid liquidity crisis
1:17 pm Friday, July 14th, 2023
(Reuters) – Pot producer Canopy Growth has signed agreements with lenders to reduce its debt by C$437 million ($333.36 million) over the next six months, weeks after the Canadian firm raised doubts about its ability to continue as a going concern.
The agreements with secured and unsecured lenders would also lower its interest expenses by C$20 million to C$30 million, the company said on Friday.
The deals include redemption agreements with certain holders of its unsecured senior notes and agreements with certain of its lenders under its credit facility.
The company’s total debt outstanding as of March 31, 2023 was C$1.3 billion.
These deals are the latest in Canopy’s ongoing efforts, including layoffs, exits from some international markets and store closures, to improve its financial position.
Separately, Canopy also received a non-compliance notice from Nasdaq, after the U.S.-listed shares of the company stayed below $1.00 per share for 30 consecutive business days.
The U.S.-listed stock was down 2.8% in premarket trading.
Once a multi-billion company, Canopy has seen its fortunes dwindling over the years, as the Canadian cannabis industry remains challenged by systemic regulatory issues and the illicit marijuana market.
The company is now valued at under C$400 million.
($1 = 1.3109 Canadian dollars)
(Reporting by Sourasis Bose in Bengaluru; Editing by Shilpi Majumdar)
