CALGARY, May 15, 2020 /CNW/ - Sundial Growers Inc.
(Nasdaq: SNDL) ("Sundial" or the "Company") is pleased to announce
it has reached an agreement to sell its U.K. asset, Bridge Farm
Group ("Bridge Farm"), to a consortia of private investors that
includes former management of Bridge Farm (collectively, the
"Purchaser") for a total consideration of approximately
$90 million1 (the
"Bridge Farm Disposition"). As consideration for the Bridge Farm
Disposition, the Purchaser will (i) assume $45 million of debt under Sundial's existing
$115 million term debt facility (the
"Term Debt Facility"), (ii) assume the contingent consideration
liabilities related to the remaining earn-out and additional share
obligations under the original Bridge Farm acquisition agreement,
dated as of July 2, 2019, and (iii)
cancel approximately 2,700,000 of Sundial common shares currently
held by certain members of the Purchaser. Sundial will not receive
any cash consideration in connection with the transaction.
"We are pleased to have reached an agreement to sell Bridge Farm
as we work to restructure our business and bring focus to our
operations," said Zach George,
Sundial's Chief Executive Officer. "This divestiture will
allow us to focus on our core strength in premium inhalable
products for the Canadian recreational market. On close, our
new management team will have reduced our run-rate annual cash
obligations by more than $50 million
and created a clear path to the equitization of our balance sheet.
I would like to thank the Bridge Farm team for their leadership and
courage in the face of COVID-19 as well as our lenders for their
continued support."
The Bridge Farm Disposition is subject to standard closing
conditions and is further conditioned on Sundial restructuring the
remaining $70 million under its Term
Debt Facility and entering into a new syndicated credit agreement
with the Company's senior lenders on or before June 1, 2020. Any failure or delay in
completing the Bridge Farm Disposition or Term Debt Facility
restructuring will likely result in the acceleration of our
outstanding debt and would have a significant negative impact on
the Company's liquidity and further impact the Company's ability to
operate as a going concern. In such a case, the Company would look
to alternative sources of financing, delay capital expenditures
and/or evaluate potential asset sales, and potentially could be
forced to curtail or cease operations or seek relief under the
applicable bankruptcy or insolvency laws.
About Sundial Growers Inc.
Sundial is a public company with Common Shares traded on Nasdaq
under the symbol "SNDL". Sundial is a licensed producer that crafts
cannabis using state-of-the-art indoor facilities. Our
'craft-at-scale' modular growing approach, award-winning genetics
and experienced master growers set us apart.
Our Canadian operations cultivate small-batch cannabis using an
individualized "room" approach, with 470,000 square feet of total
space.
Sundial's brand portfolio includes Top Leaf, Sundial
Cannabis, Palmetto and Grasslands. Our
consumer-packaged goods experience enables us to not just grow
quality cannabis, but also to create exceptional consumer and
customer experiences.
We are proudly Albertan, headquartered in Calgary, AB, with operations in Olds, AB, and Rocky View County, AB.
Forward-Looking Statement
This news release includes certain statements and information
that constitute forward-looking information within the meaning of
applicable securities laws. All statements in this news release,
other than statements of historical facts, including, but are not
limited to, statements regarding the consummation of the Bridge
Farm Disposition, the Company's ability to restructure its Term
Debt Facility and receive amendments to its loan agreements, the
Company's ability to reduce its annual cash obligations, the
development of the legal cannabis market and future financings are
forward-looking statements.
Forward-looking statements or information relate to future
events and future performance and include statements regarding the
expectations and beliefs of management. Often, but not
always, forward-looking statements and forward-looking information
can be identified by the use of words such as "plans", "expects",
"potential", "is expected", "anticipated", "is targeted", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or
"believes" or the negatives thereof or variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements or information include, but
are not limited to, statements or information with respect to known
or unknown risks, uncertainties and other factors which may cause
the actual industry results, to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements or information.
Forward-looking statements or information are subject to a
variety of risks and uncertainties which could cause actual events
or results to differ from those reflected in the forward-looking
statements or information, including, without limitation, risks and
uncertainties relating to: failure to complete the Bridge Farm
Disposition; failure to complete the Term Debt Facility
restructuring; receive amendments to its loan agreements; the state
of financial markets, regulatory approval; requirements for
additional capital; interest rates; the global economy; the
speculative nature of production activities; periodic interruptions
to production, labor disputes; supply problems; uncertainty of
production and cost estimates; changes in project parameters as
plans continue to be refined; volatility of the market price of the
Company's common shares; insurance; competition; currency
fluctuations; loss of key employees; other risks of the cannabis
industry as well as those factors discussed in the section entitled
"Risk Factors" in the Company's Annual Report on Form 20-F dated
March 30, 2020. Should one or more of
these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in forward-looking statements or information.
The Company disclaims any intent or obligation to update
forward-looking statements or information except as required by
law, and you are referred to the full discussion of the Company's
business contained in the Company's reports filed with the
securities regulatory authorities in Canada and the United states. Although the
Company has attempted to identify important factors that could
cause actual results to differ materially, there may be other
factors that could cause results not to be as anticipated,
estimated or intended.
The Company provides no assurance that forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements. The Company does not assume the
obligation to revise or update these forward-looking statements
after the date of this document or to revise them to reflect the
occurrence of future unanticipated events, except as may be
required under applicable securities laws.
_____________________
1 All amounts referred to are in Canadian dollars,
unless otherwise specified
View original content to download
multimedia:http://www.prnewswire.com/news-releases/sundial-enters-into-agreement-to-sell-bridge-farm-group-301060077.html
SOURCE Sundial Growers Inc.