SMITHS FALLS, Ont. — Shares of Canopy Growth Corp. fell more than 30 per cent after it announced it has signed deals with its secured and unsecured lenders to reduce its debt, but will issue 90.4 million shares plus new convertible debt to do so.
Shares in the cannabis company were down 30 cents, or about 35 per cent, at 55 cents in mid-morning trading on the Toronto Stock Exchange.
Canopy says the plan will help reduce its total debt by about $437 million over the next six months and lower annual interest costs by approximately $20 million to $30 million.Â
Canopy chief financial officer Judy Hong says the agreements will enable the company to preserve cash and further improve its balance sheet through accretive and meaningful reductions in its overall debt.
The company says it will repay about $193 million in existing notes with a mix of cash, 90.4 million shares and $40.4 million in new unsecured non-interest bearing convertible debentures. Canopy will also reduce $100 million debt provided under a credit agreement for a cash payment of $93 million, with the expectation of further principal reductions at 95 cents on the dollar upon completion of certain asset sales.
The company has been selling some of its facilities as part of an organizational transformation announced last year to help reduce spending.Â
This report by The Canadian Press was first published July 14, 2023.
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The Canadian Press
