PICKERING, Ontario – MTL Cannabis Corp. closed a credit agreement with a leading Canadian Schedule 1 bank for an aggregate of approximately $27 million. The company plans to use the fund to (i) assist with growth capital expenditures, (ii) finance working capital needs, and (iii) refinance pre-existing debts.
The Credit Facility is comprised of (i) an uncommitted demand revolving credit facility of up to $4,000,000, margined against the eligible accounts receivable of the company (ii) a committed non-revolving term credit facility available by way of a single drawdown in an amount equal to $6,750,000, with a contractual term of three years, (iii) a committed non-revolving term credit facility available by way of a single drawdown in an amount equal to $12,150,000, with a contractual term of three (3) years, and (iv) an uncommitted delayed draw non-revolving term credit facility available by way of one or more drawdowns in a total aggregate amount of $4,120,000.
The Credit Facility will bear an interest rate of prime or adjusted term CORRA plus an applicable margin. The Credit Facility is secured against (i) all of the present and after-acquired undertakings, property and assets of the Company and its material operating subsidiaries, and (ii) the property located at 551 Rue Saint-Marc, Louiseville, QC, by a first-ranking collateral mortgage.
“We are incredibly excited to partner with the team to finance the continued growth of the business and strengthen our balance sheet,” said Michael Perron, CEO of the Company. “We fully appreciate the confidence that the bank has in our management team and the business we have built, and we look forward towards repaying that trust with continued performance as we grow together in the coming years.”
The Existing Debts being refinanced under the Credit Facility were derived solely from the predecessor business of Canada House Cannabis Corp. and incurred prior to the completion of the business combination of Canada House Cannabis Corp. and Montréal Cannabis Médical Inc., and include the entirety of the $8,316,830.21 in amounts payable pursuant to the convertible debenture issued on August 4, 2020, as amended, to Archerwill Investments Inc., and delivery of all remaining related 14,466,568 prepayment warrants with an exercise price $0.5749; $10,041,094.94 in amounts payable pursuant to the historical acquisition of IsoCanMed Inc. that closed June 12, 2020; and approximately $575,000 in amounts payable pursuant to the secured debentures issued on December 5, 2017.
“We view the refinancing of the legacy Canada House creditors as the final chapter in the closing of the business combination between Canada House and MTL Cannabis,” added Richard Clement, Chairman and co-founder of MTL Cannabis Corp. “We are extremely proud of managements’ financial stewardship of the combined company and the turnaround of our financial position that this milestone symbolizes.”
About MTL Cannabis Corp.
MTL Cannabis Corp. is the parent company of Montréal Medical Cannabis Inc., a licensed producer operating from a 57,000 sq ft licensed indoor grow facility in Pointe Claire, Québec; Abba Medix Corp., a licensed producer in Pickering, Ontario that operates a leading medical cannabis marketplace; IsoCanMed Inc., a licensed producer in Louiseville, Québec growing best-in-class indoor cannabis, in its 64,000 sq. ft. production facility; and Canada House Clinics Inc., operating clinics across Canada that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from simple and complex medical conditions.
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