Cannara Biotech Secures An Additional $10M In Non-Dilutive Capital With Its Lead Credit Provider, BMO Commercial Banking

Cannara Biotech Inc. LOVFF LOVE (FRA:8CB) has raised an additional $10 million of credit facilities from its lead bank, BMO Commercial Banking via a $5 million increase in its term loan facility and a $5 million increase in its revolving line of credit. Under the terms of the initial agreement, the credit facility included a three-year term loan for $45 million with an accordion for up to an additional $10 million and a $5 million line of credit. Other favorable terms as part of the original deal included a declining interest rate over time as the company hits certain covenant thresholds and the ability to repay the facility without penalty at any time.

The new term loan proceeds will be used to fund the completion of the construction of a 44,950 sq. ft. building adjacent to the Valleyfield mega-facility, in an unlicensed area which has been pre-leased to a new non-cannabis tenant, creating an accretive real estate asset with incremental future cash flows. The additional amounts available under the expanded credit line will provide flexibility in working capital during this high growth stage of Cannara's development.

"An opportunity to maximize one of our assets currently not in use that will generate additional cash flow from a reputable tenant made this an easy decision," stated Nicholas Sosiak, CFO of Cannara. "We are pleased to secure this non-dilutive capital and appreciate the continued support from our tremendous partner, BMO Commercial Banking. This capital expenditure will generate long-term returns for Cannara, while simultaneously increasing the value of our asset base. As we continue to mature as a company, and as the economic landscape continues to remain volatile, flexibility is of utmost importance to us, and the enhanced working capital position will allow us to move forward on our immediate and mid-term growth objectives without interruption as we remain committed to our goal of becoming the preferred cannabis producer in Canada," concluded Sosiak.

Photo by Giorgio Trovato on Unsplash

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