iAnthus Capital Holdings, Inc. (CSE: IAN) (OTCQX: ITHUF) is redeeming its outstanding convertible debentures of MPX Luxembourg SARL, a wholly-owned subsidiary of iAnthus, in the aggregate principal amount of $32,257,804.07. The redemption date of the Debentures will be April 24, 2019. The Debentures are redeemable for an amount equal to $860.43 per $1,000 principal amount of Debentures.
“The MPX Luxembourg convertible debentures were a legacy obligation inherited by iAnthus as part of the acquisition of MPX Bioceutical Corp. The redemption or resulting conversion of these debentures will enable us to significantly reduce our interest expense and potential further future dilution for our shareholders,” said Hadley Ford, Chief Executive Officer of iAnthus. “The removal of this expensive debenture is a key part of our commitment to optimizing our cost of capital. Given that the holders of the debentures are significantly in the money, it is our expectation that the vast majority of holders will convert, as opposed to redeem their notes.”
iAnthus acquired MPX in an all-stock transaction valued at C$835 million that was announced in October. The combined company, excluding MPX International, will include operations and cannabis licenses in 10 states that will permit iAnthus to operate 56 retail locations and 14 cultivation/processing facilities.
MPX Capital Raise
In a separate transaction, MPX International Corporation (CSE: MPXI) closed its previously announced non-brokered private placement offering of units of the Company. Due to increased demand, the previously announced offering was increased from C$20 million (approximately $15 million) to C$26,905,162 (approximately $20.2 million). The offering consists of the issuance of 56,052,421 Units issued at a price of C$0.48 per Unit.
MPX said it intends to use the net proceeds from the offering to fund capital expenditures in Owen Sound, Ontario as well as potential future acquisitions and for working capital and general corporate purposes. The securities issued pursuant to the offering are subject to a four month hold period in accordance with applicable securities laws expiring on July 21, 2019.
iAnthus Redemption Terms
Prior to the redemption of the Debentures, each holder thereof will have the right to convert the Accrued Principal Amount of their Debentures into units of iAnthus, each such unit consisting of 0.1673 of one common share in the capital of iAnthus and 0.08365 of one common share purchase warrant at a conversion price equal to $0.74 per Unit at any time prior to close of business on April 23, 2019. A holder electing to convert their Debentures will receive 1,729.80 Units for each US$1,000of Accrued Principal Amount. No fractional iAnthus Shares or iAnthus Warrants will be issued on conversion.