Canadian Cannabis Stock News: Aphria (TSX: $APH) (OTCQB: $APHQF) Raises $100 Million to Fund Continued Expansion of Production Capacity and Other Strategic Opportunities
LEAMINGTON, ONTARIO - April 20, 2017 (Investorideas.com Newswire) NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES - Aphria Inc. ("Aphria" or the "Company") (TSX:APH) (OTCQB:APHQF), a Health Canada Licensed Producer of medical cannabis products, announced today that it has secured a $100 million raise, including a $75 million bought deal equity financing and $25 million in debt financing through a five-year term loan. This is the first time Aphria has raised both debt and equity simultaneously.
The Company expects that 50% of the net proceeds of the Offering will be allocated towards the currently unfunded portion of Part IV Expansion, with the balance being allocated between the working capital necessary to support the Company once the Part IV expansion is complete and strategic investments.
"This fund raising is a testament to the confidence of the investment community in Aphria's success to date and our vision for the future," said Vic Neufeld, Chief Executive Officer, Aphria.
"Through this raise, we are not only looking at the needs of today, but what Aphria is going to need to do in the years ahead to dominate the market. When completed in 2018, our four-part expansion plan is expected to supply more than 75,000 kg of high-quality cannabis at one of the lowest costs in the industry. We are well positioned to continue to provide shareholder value and meet the increasing consumer demand for medical and recreational marijuana," said Mr. Neufeld.
As part of the raise, Aphria entered into an agreement with Clarus Securities Inc., on behalf of a syndicate of underwriters (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a "bought deal" basis, 11,538,480 Common Shares (the "Common Shares") of the Company at a price of $6.50 per Common Share (the "Offering Price") for aggregate gross proceeds to the Company of $75,000,120 (the "Offering").
The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 1,730,772 Common Shares at the Offering Price, exercisable in whole or in part at any time for a period ending 30 days from the closing of the Offering. In the event the over-allotment option is exercised in full, the aggregate gross proceeds of the Offering will be $86,250,138.
The Common Shares will be offered by way of a short form prospectus to be filed in each of the provinces of Canada, other than the Province of Quebec, and in those jurisdictions outside of Canada and the United States which are agreed to by the Company and the Underwriters, where the Common Shares can be issued on a private placement basis, exempt from any prospectus, registration or other similar requirements. The deal is expected to close on May 9, 2017 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX.
The securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. state securities laws, and may not be offered or sold in the United States without registration under the U.S. Securities Act and all applicable state securities laws or compliance with the requirements of an applicable exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
The remaining portion of the raise is comprised of a 5-year, $25 million term loan with WFCU Credit Union ("WFCU") bearing interest at 3.95% and a 15-year amortization ("Debt Financing"). The facility will be entered into on May 9, 2017. The term loan is secured by a first charge on the Company's real estate holdings, a first position on a general security agreement, certain cash security and an assignment of fire insurance to the lender.
Aphria Inc., one of Canada's lowest cost producers, produces, supplies and sells medical cannabis. Located in Leamington, Ontario, the greenhouse capital of Canada. Aphria is truly powered by sunlight, allowing for the most natural growing conditions available. We are committed to providing pharma-grade medical cannabis, superior patient care while balancing patient economics and returns to shareholders. We are the first public licensed producer to report positive cash flow from operations and the first to report positive earnings in consecutive quarters.
We Have a Good Thing Growing.
For more information, visit www.aphria.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "potential", "believe", "intend" or the negative of these terms and similar expressions. Forward-looking statements in this news release include, but are not limited to, statements with respect to internal expectations, estimated margins, completion of the Debt Financing, timing for completion of final TSX approval, expectations for future growing capacity and costs, the completion of any capital project or expansions, any commentary related to the legalization of marijuana and the timing related thereto, expectations of Health Canada approvals and expectations with respect to future production costs. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving medical marijuana; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the medical marijuana industry in Canada generally, income tax and regulatory matters; the ability of Aphria to implement its business strategies; competition; crop failure; currency and interest rate fluctuations and other risks.
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Mr. Vic Neufeld
President and CEO
President and CEO
Disclosure: Aphria Inc. (TSX:APH) (OTCQB:APHQF) is a featured company on the 420 Cannabis Investor Ideas of 2017 at www.420cannabisinvestorideas.com
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