Zenabis To Merge With Another Canadian LP As Sundial Acquires Subsidiary

Cannabis company Zenabis Global Inc. ZENA is poised to merge with an undisclosed licensed cannabis producer.

The news came on the heels of Sundial Growers Inc.'s SNDL attempts to buy the Vancouver-based company. Last week, it agreed to acquire a special purposed vehicle that owns $58.9 million of senior secured debt of Zenabis Global Inc.

According to a Wednesday's update, prior to Sundial's move, Zenabis was in talks with a lender to extend the deadline for the repaying of $7 million of the principal amount of debt.

However, the lender demanded repayment of the principal amount of debt on Dec. 31, 2020.

As a result, Zenabis decided to sell $7 million of dried cannabis to an undisclosed Canadian licensed producer.

The company said it utilized the proceeds to repay the debt to the Senior Lender.

Zenabis said Wednesday that Senior Lender's claims are "spurious and without merit and intends to vigorously defend against what it considers to be an ill-disguised attempt to circumvent a fair and competitive process to acquire the Company by improperly foreclosing the equity of the Company or compelling Zenabis to enter into a transaction with Sundial."