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Auxly Cannabis Group has signed a nonbinding term sheet to amend the credit facility between a syndicate of lenders and its wholly owned subsidiary, Auxly Leamington.
The Canadian cannabis producer said it is working with the lenders on a definitive, binding amendment, “although there can be no assurance that a definitive amendment agreement with the lenders will be reached,” according to a Wednesday news release.
In the meantime, Toronto-based Auxly said the lenders have provided a third interim extension of the credit facility’s maturity date to Jan. 31, 2024.
The syndicate of lenders is led by the Bank of Montreal as administrative agent.
The nonbinding revised terms include:
- Extending the maturity date by two years – until Dec. 31, 2025 – with an option for Auxly Leamington to extend an additional year by making the principal repayment by Dec. 31, 2025, of 2.5 million Canadian dollars ($1.9 million).
- Updated earnings before interest, taxes, depreciation and amortization (EBITDA) and other financial and operational covenants for Auxly Leamington. No further details on this were shared.
- Increasing quarterly principal payments throughout the term.
- The obligations of Auxly Leamington under the credit facility will continue to be supported by a CA$33 million limited guarantee by Auxly.
In November, Auxly reported that its adjusted EBITDA for the three months ended Sept. 30, 2023 was CA$100,000, an improvement from negative CA$5.8 million in the previous year’s comparable quarter.
The company’s debt stood at CA$139.2 million, 20% lower than the same time a year earlier.
Auxly shares trade as XLY on the Toronto Stock Exchange.
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