After initially proposing the plan earlier this month, Ontario-based cannabis company Aphria Inc. (TSX: APHA; NYSE: APHA) today is raising funds by closing a convertible senior notes offering.
The offering was snapped up by both U.S. and international qualified buyers in compliance with the U.S. Securities Act of 1933, with the notes equivalent to 106.5 shares of Aphria per $1,000 of principal.
That price represents an amount equal to $9.38 per share of Aphria, with a conversion premium of 21% over Aphria’s current price of $7.70 a share trading on the New York Stock Exchange.
While the initial amount for the private placement was listed at $300 million, the unnamed purchasers have exercised their purchaser’s option in full to increase that amount to a total of $350 million.
The additional $50 million sale is expected to officially close tomorrow – April 26 – when final closing conditions are met.
With an annual interest rate of 5.25%, starting at the end of 2019 Aphria will make two repayments a year on December 1 and June 1, with the notes due to mature in the summer of 2024.
Discussing this new fundraising through the closing of the convertible senior notes offering, the company commented:
Apart from closing that offering, this has been a busy year for Aphria, with the company receiving a license amendment from Health Canada for the Aphria One greenhouse facility to triple its current capacity.
The company is also currently expanding internationally with German operations now underway. Aphria was one of 13 companies to receive a license from the German government as the country is now allowing domestic cultivation of cannabis for medical purposes.
A new German indoor cultivation facility from Aphria is already being constructed, and is expected to be completed by mid-2020. To meet existing demand, the company will be importing both cannabis oil and dried flower products from current facilities in Canada and Denmark.
A full breakdown of Aphria’s fiscal Q3 2019 financial results and operational handling can be found over here.