Aurora Cannabis, the Canada-based company charged with defining the future of cannabinoids globally, unveiled late last week that it has repurchased a total principal amount of approximately $20 million of its convertible senior notes. The total cost, including accrued interest, is approximately $19.2 million in cash.
The transaction results in the repurchase of a portion of the notes at a 5.25% discount to face value. According to the firm, the objective was to reduce its corporate and annual cash interest costs. Based on the bond repurchases made beginning in the third quarter of 2022, annual cash interest savings are now expected to amount to $7.5 million.
The sector is now witnessing one of the strongest balance sheets in Aurora, with nearly $455 million in cash, including this recent transaction. The first half of fiscal 2023 is already on the horizon and the company reiterates its expectation to achieve a positive adjusted EBITDA run-rate during that period.
This update comes shortly after Aurora also completed a bought deal financing arrangement. The firm announced earlier this month the closing of its offer to purchase units of the company for gross proceeds of approximately $172.5 million. The deal was previously announced and now the company said it sold more than 70 million units with an individual price of $2.45.
Each unit consists of one common stock purchase warrant and one share of Aurora common stock. The terms indicate that each warrant is exercisable (at a price of $3.20 per warrant share) to acquire one common share of the company for a period of 36 months after the offering closes. All of this will be subject to various adjustments.
The offering had BMO Capital Markets and Canaccord Genuity as its bookrunners. According to the management, the net proceeds of the offering will be used essentially for general corporate purposes. Following the outcome of the recently raised capital, the firm made it clear that the previously announced at-the-market facility will not be used again in the near term.