Supreme Cannabis has entered into a credit agreement with Bank of Montreal as lead arranger and agent for $90 million in senior secured credit facilities consisting of a term loan of $70 million and a revolving credit facility of $20 million.
The credit facility includes a $10 million accordion feature.
“In the first quarter of fiscal 2020, we operated through challenging market conditions while integrating new businesses and product planning for the second half of the year. The closing of up to $90 million in credit facilities from tier one lenders is a significant achievement that positions the company to execute on our strategy and prudently grow the business in fiscal 2020 and beyond,” said Navdeep Dhaliwal, CEO of Supreme Cannabis.
The credit facility is secured by the assets of the company including the 7ACRES facility. Pricing is based on a set margin over the BMO CAD Prime Rate or Bankers’ Acceptance and a pricing grid linked to certain financial ratios.
It is expected to be at the outset between 5% and 6% per annum. The credit facility has a three-year term and contains customary financial and restrictive covenants. Supreme Cannabis may repay any portion drawn under the credit facility at any time without penalty. In connection with the closing of the credit agreement, the Company has initially drawn $55 million of the term loan.
