Canopy Growth closes exchange, reduces debt by C$263 million

By Mary-Katherine Stinson

Lexington, Ky., July 19 – Canopy Growth Corp. closed its previously announced privately negotiated exchange transaction of certain 4.25% convertible senior notes due 2023 on July 18, according to a news release Tuesday.

Constellation Brands, Inc.’s wholly owned subsidiary Greenstar Canada Investment Limited Partnership participated in the transaction.

Under the agreement, Canopy acquired and canceled approximately C$263 million of its notes from a limited number of holders, including Greenstar, for a total purchase price of approximately C$260 million payable in common shares of the company. The amount excludes about C$5.4 million in interest paid in cash.

On the initial closing, 35,662,420 Canopy shares were issued to the noteholders other than Greenstar based on a price equal to $3.50 per Canopy share, which was the closing price on the Nasdaq on June 29.

On the final closing 11,896,536 Canopy shares were issued to the noteholders other than Greenstar at $2.6245 per Canopy share. Pricing was based on the volume-weighted average trading price of Canopy shares on the Nasdaq for the 10 consecutive trading days beginning on, and including, June 30.

In addition, on the final closing, 29,245,456 Canopy shares were issued to Greenstar at a price per Canopy share equal to the averaging price.

Canopy acquired and canceled C$100 million of the notes held by Greenstar in exchange for 29,245,456 Canopy shares, representing approximately 6.7% of the issued and outstanding shares on a non-diluted basis, immediately prior to the final closing.

Upon completion of the transaction, Constellation Brands, though Greenstar and CBG Holdings LLC, holds 171,499,258 Canopy shares representing approximately 35.7% of Canopy’s non-diluted shares.

The transaction as conducted as a private placement.

Cassels Brock & Blackwell LLP and Latham & Watkins LLP acted as legal counsel to Canopy Growth. HudsonWest LLC and BMO Capital Markets acted as financial advisers and exchange agents to Canopy Growth.

Canopy Growth is a Smiths Falls, Ont.-based medical and recreational marijuana company.

© 2015 Prospect News.
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