What happened: Cannabis company announced it has entered into a series of agreements, including privately negotiated redemption agreements with certain holders of its unsecured senior notes due July 15, 2023 (the "existing notes") and agreements with certain of its lenders under its term loan credit agreement dated March 18, 2021, that will have the overall effect of deleveraging the company's balance sheet.
As a result of the agreements, the company is expected to reduce its total debt by approximately $437 million over the next 6 months and lower annual interest costs by approximately $20 to $30 million. Following the completion of the transactions contemplated by the redemption agreements, the company will preserve approximately $92 million in cash by settling approximately $193 million aggregate principal amount of the existing notes with a mix of consideration that includes common shares of the company and newly issued unsecured non-interest bearing convertible debentures. Additionally, the company will reduce $100 million of principal indebtedness under the credit facility provided under the credit agreement for a cash payment of $93 million, with the expectation of further principal reductions at $0.95 on the dollar upon completion of certain asset sales.
Annual General and Special Meeting Update
Canopy Growth intends to file its preliminary proxy statement in connection with the company's annual general and special meeting to be held on September 25, 2023, on July 14, 2023. In addition to the normal course business brought before the meeting, the company intends to seek shareholder approval for, among other things, the issuance of all of the debenture shares in excess of 19.99% and 25%, as applicable, of the issued and outstanding common shares in accordance with the applicable rules and regulations of the Nasdaq Stock Market and the Toronto Stock Exchange in connection with the redemption, and the adoption of a new simplified equity plan.
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