MediPharm Labs Inc., a wholly-owned subsidiary of MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF), has secured a $38.7 million credit facility from a top 5 Canadian Schedule 1 bank. Although the company initially sought $20 million, the credit facility was upsized and is comprised of a revolving term facility, a non-revolving term facility and a non-revolving delayed draw term facility.
“With the successful upsizing of our Credit Facility and the proceeds from our recent $75 million bought deal equity offering, we have strengthened our balance sheet and our ability to execute our global business plan to efficiently seize the growth opportunities before us,” said Pat McCutcheon, CEO of MediPharm Labs. “In particular, this enlarged facility will enhance liquidity and support the delivery of our stated Canadian and Australian capex strategy, to ramp up of production capacity to meet contracted and expected demand for our new product classes.”
The revolving term facility is for up to $25 million and has a one year term. The $25 million can be drawn in either Canadian or Australian dollars and is meant to be used for Canadian and Australian working capital.
Over the last several months the company has been making strides in expanding its international footprint. Last week, MediPharm Labs announced that it had increased its export of medical cannabis concentrates to Australia by 137% and that it had signed a private sales agreement with the German pharmaceutical company ADREXpharma.
The three-year term non-revolving term facility, which totals approximately $5.7 million, was fully drawn upon closing and was used to refinance and reduce the interest expense of an existing mortgage. The non-revolving delayed draw term facility of up to $8 million will be used for capital expenses and has a term of three years. The credit facility will have an interest rate set at the yet-unnamed bank’s prime lending rate plus a certain amount determined by MediPharm’s debt to EBITDA ratio.