Auxly Cannabis reaches ‘turning point’ with closing of 2 transactions

Auxly Cannabis Group has closed on two transactions intended to reduce the Canadian operator’s debt and strengthen its financial position.

The transactions, originally announced June 19, extend its credit facility with the Bank of Montreal and settle all debts owed to Imperial Brands, according to a Tuesday news release.

With the transactions completed, Toronto-headquartered Auxly has:

The moves leave Imperial Brands with a 19.9% stake in Auxly.

The British tobacco giant first invested in the cannabis operator in 2019.

“The closing of these transactions marks a turning point for Auxly,” CEO Hugo Alves said in a statement.

“We emerge from these transactions with a transformed balance sheet and the financial strength to fuel future growth.”

Chief Financial Officer Travis Wong said the transactions are a milestone for Auxly.

“We’ve reduced debt, extended the term of our senior facility and secured a new working capital facility,” Wong said.

“These improvements provide us with the financial flexibility to execute our strategy with confidence.”

Auxly shares trade as XLY on the Toronto Stock Exchange.