With the middle of 2021 having arrived, cannabis companies continue to redefine their operations in order to continue driving the industry forward. With marijuana reform still expected to come to the US sometime this year, companies want to ensure that they’re prepared for what could be a major growth explosion in sales and operations. Aurora Cannabis is included in this group and announced yesterday a significant overhaul of its balance sheet that will help it grow.
Aurora Cannabis has repaid, in full, an amended and restated credit facility that was to mature in December of next year. It included a term loan and a revolving line of credit, and the early repayment came without any penalties. The amount of the credit facility was $73.90 million. As a result of the early repayment, Aurora will save around $21 million over the next 12 months, based on the outstanding balance of the facility at the time of the repayment.
“We are pleased to have completed our balance sheet restructuring through the full repayment of our credit facility. Since assuming the CEO role late last year, I recognized having a strong balance sheet is critical in what is a very dynamic industry. Delivering on this priority allows us the ability to operate the business and pursue growth opportunities unconstrained by our balance sheet. Let me also express our appreciation to Aurora’s lenders who have provided us with exceptional support throughout this process,” says Aurora Cannabis CEO Miguel Martin.
In addition to avoiding expensive repayments, Aurora is also improving its cash position and giving itself more flexibility to fund its current, and future, operations. Supporting those funds, and the potential growth of the global cannabis industry, Aurora also has the option to issue and sell as much as $300 million in common shares of the company through an at-the-market equity program; however, it doesn’t anticipate resorting to a sale unless it has a clear plan for how the proceeds are going to be used.