Zenabis Secures $51M Credit Facility With Major Canadian Bank

Zenabis has entered into a $51,000,000 credit agreement for credit facilities, provided by a major Canadian chartered bank for the purposes of repayment of existing Bevo Farms Ltd. debt, the intended acquisition of Topgro and conversion of the Langley Facility for cannabis production

Zenabis Global Inc. (TSXV: ZENA) is pleased to announce that on January 20, 2019 (the “Closing Date”) Zenabis, through its subsidiary Bevo Farms Ltd. (“Bevo”), entered into a credit agreement for an aggregate of $51,000,000 in credit facilities (the “Facilities”) with a major Canadian chartered bank (the “Lender”). The Facilities are available as a $46,700,000 term loan, $2,000,000 revolving line of credit, $2,000,000hedging facility, and $300,000 credit card for purposes described below.

Revolving Facility: $2,000,000 credit facility to be drawn, repaid and redrawn at the discretion of the borrower to fund working capital and general corporate purposes.

Term Facility Tranche 1: $33,256,958 by way of a single advance for the repayment of current indebtedness provided by FCC, the repayment of existing equipment loans and the intended acquisition of Topgro.

Term Facility Tranche 2: $13,443,042 for capital expenditures. This includes $12,943,042 towards the conversion of first 435,600 sq. ft. of Zenabis Langley for the purposes of cannabis cultivation and production, available from time to time at the discretion of the borrower in up to five installments, up to and including the Final Advance Date of July 30, 2019.  This tranche also includes $500,000 for propagation conversion capital expenditures for Zenabis Topgro.

Hedging Facility: $2,000,000 credit facility for the purposes of managing interest rate and foreign exchange risks.

Credit Card Facility: $300,000 for general corporate purposes.

The obligations under the Facilities will be primarily secured by Zenabis’ Langley facility and the Topgro facilities. The Revolving Facility and Term Facility will mature on the date that is three years from the Closing Date, January 21, 2022. The sources and intended uses of funds regarding the term facility are outlined below. Any advances under the Revolving Facility and Term Facility are subject to certain conditions precedent customary for financings of this type.

All credit facilities are subject to the customary financial covenants (measured quarterly) for a financing of this type.

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