Auxly Cannabis Group Inc. (TSX: XLY) (OTCQX: CBWTF) has announced a two-year extension to the maturity date of a $123 million debenture held by its partner, Imperial Brands PLC, the company said Wednesday.
The loan, originally due in September 2024, will now mature in September 2026. Imperial Brands, which is the fourth-largest tobacco company in the world, and Auxly have set the new arrangement to take effect from August 16, 2023.
Under the same agreement, Imperial Brands may convert the debenture into Auxly’s common shares at $0.81 per share anytime before its maturity date. However, a reshuffle in Auxly’s board has seen Murray McGowan, Imperial Brands’ nominee, step down due to Imperial Brands no longer holding the requisite share percentage in Auxly.
In a statement, Hugo Alves, CEO of Auxly, thanked McGowan for his services and expressed optimism for the company’s future and its ongoing relationship with Imperial Brands.
“The extension of the debenture will further our goal of prudently managing and strengthening our balance sheet,” Alves said.
Auxly also announced the resignation of CFO Brian Schmitt, who will leave for an opportunity outside the cannabis industry. Travis Wong, Auxly’s Senior VP of Finance, will fill the position in an interim capacity.
Wong, an Auxly veteran since 2017, is a Canadian CPA and holds an MBA from the University of Oxford. He brings corporate finance and capital markets experience, having advised on over $5 billion of public and private M&A transactions in his career, the company said.
In addition, the company has received necessary approvals for changes to the terms of 27.38 million common share purchase warrants, effectively lowering the exercise price and extending the expiry date.