RIV Capital, formerly known as Canopy Rivers, has specialized in investments and acquisitions in the cannabis industry since its inception. It has continued to make strategic moves to better leverage its strength and leadership in the space in order to expand its portfolio. At the same time, it has also taken part in a number of initiatives to support those companies it backs financially. One of those companies is PharmHouse, which is now going through a transitional phase. As it does, RIV Capital is there, providing financial support once again.
PharmHouse is selling some of its operating assets, including a facility and equipment at that facility. It has now been approved by the Ontario Superior Court of Justice to proceed with the sale, granted under the Companies’ Creditors Arrangement Act, removing one of the last remaining hurdles needed to resolve before finalizing the arrangement. As long as certain standard closing conditions are met, PharmHouse expects to be able to complete the sale during the next fiscal quarter.
In conjunction with the sale, RIV Capital is going to help PharmHouse pay off some of its debt. The company announced that it will be making a voluntary payment of $25 million to cover a portion of the $90 million non-revolving syndicated credit facility held by PharmHouse. That credit line is directly linked to the guarantee of a separate PharmHouse credit facility.
RIV Capital explains of its confidence in supporting the company during the transition, “As noted in the Company’s press release announcing the Agreement, which was entered into by PharmHouse on March 3, 2021, the Company does not anticipate any material changes to the PharmHouse Recoverability Assessment presented in its interim consolidated financial statements for the three and nine months ended December 31, 2020… As a result of the Guarantee Payment, the Company’s estimated liability in respect of the PharmHouse Credit Facility will be reduced by $25.0 million. The Company is making the Guarantee Payment prior to March 31, 2021 in order to, among other things, reduce near-term debt servicing costs and for tax planning purposes in connection with the Company’s recent disposition of certain assets to Canopy Growth Corporation, which resulted in a significant capital gain for the Company.”