Decibel Cannabis Company Secures $61 Million Credit Facility to Fuel Growth and Innovation
Decibel Cannabis Company Inc., a prominent player in the premium cannabis market, has recently confirmed the completion of a significant credit facility worth $61 million in collaboration with ATB Financial and ATB Cormark Capital Markets. This strategic financial move marks a pivotal moment for the company as it gears up for future growth and enhances its operational capabilities.
The $61 million financing package includes a variety of components, each designed to bolster Decibel's financial standing and facilitate corporate development initiatives. Notably, the primary offer consists of a $40 million First Lien Term Facility. This financial instrument will allow Decibel to pay off its existing term loan, which is due in January 2027, extending the maturity to February 2030. Through this refinance, the company aims to alleviate its payment obligations by $5 million in the upcoming fiscal year, thus improving its cash flow situation significantly.
Furthermore, Decibel has secured a $10 million Revolving First Lien Credit Facility. This aspect of the deal is particularly advantageous as it provides the company with immediate access to capital for growth opportunities. At the conclusion of the deal, $3 million from this facility will be readily available, with additional funds to be released upon meeting certain conditions. This structure grants Decibel increased financial flexibility, crucial for effective corporate development and strategic expansion.
In addition, the financing includes an $11 million Second Lien Term Facility. Although this introduces additional layers of liability, it also enhances the company's cash flow potential through structured principal repayments over the term and a bullet repayment upon maturity. The integration of these loan facilities signifies Decibel's focus on ensuring a robust financial future and positions it as a resilient competitor in the cannabis sector.
The leadership at Decibel expresses excitement over this funding round. Ben Sze, the Chief Executive Officer, emphasized that this new arrangement places the company in a favorable position without immediate debt pressures. This, coupled with its free cash flow positive status, underlines Decibel’s readiness to maintain its leadership within Canada's ready-to-consume cannabis categories.
Moreover, the company is keen on amplifying its international growth through its AgMedica facility, thus expanding its global market presence. Stuart Boucher, Decibel's Chief Financial Officer, noted that the new financing would enable the company to explore additional growth avenues, which may further accelerate its trajectory in the burgeoning cannabis industry. The CEO and CFO extend their appreciation to the ATB team for the partnership and their role in facilitating this substantial backing, which demonstrates trust in Decibel's vision and execution capabilities.
The Loan Facilities are structured with adjustable interest rates over ATB’s benchmark rates, and they include standard financial covenants, ensuring the company’s ongoing compliance with necessary fiscal guidelines. Such arrangements highlight both lender confidence and Decibel's commitment to maintaining financial health.
In conclusion, Decibel Cannabis Company is poised to leverage this newly acquired credit facility to solidify its market leadership, foster innovation, and expand operations both within Canada and internationally. With the support of ATB Financial, Decibel is on a trajectory of promising growth, reflecting a well-thought-out financial strategy aimed at thriving in an increasingly competitive cannabis marketplace.
The $61 million financing package includes a variety of components, each designed to bolster Decibel's financial standing and facilitate corporate development initiatives. Notably, the primary offer consists of a $40 million First Lien Term Facility. This financial instrument will allow Decibel to pay off its existing term loan, which is due in January 2027, extending the maturity to February 2030. Through this refinance, the company aims to alleviate its payment obligations by $5 million in the upcoming fiscal year, thus improving its cash flow situation significantly.
Furthermore, Decibel has secured a $10 million Revolving First Lien Credit Facility. This aspect of the deal is particularly advantageous as it provides the company with immediate access to capital for growth opportunities. At the conclusion of the deal, $3 million from this facility will be readily available, with additional funds to be released upon meeting certain conditions. This structure grants Decibel increased financial flexibility, crucial for effective corporate development and strategic expansion.
In addition, the financing includes an $11 million Second Lien Term Facility. Although this introduces additional layers of liability, it also enhances the company's cash flow potential through structured principal repayments over the term and a bullet repayment upon maturity. The integration of these loan facilities signifies Decibel's focus on ensuring a robust financial future and positions it as a resilient competitor in the cannabis sector.
The leadership at Decibel expresses excitement over this funding round. Ben Sze, the Chief Executive Officer, emphasized that this new arrangement places the company in a favorable position without immediate debt pressures. This, coupled with its free cash flow positive status, underlines Decibel’s readiness to maintain its leadership within Canada's ready-to-consume cannabis categories.
Moreover, the company is keen on amplifying its international growth through its AgMedica facility, thus expanding its global market presence. Stuart Boucher, Decibel's Chief Financial Officer, noted that the new financing would enable the company to explore additional growth avenues, which may further accelerate its trajectory in the burgeoning cannabis industry. The CEO and CFO extend their appreciation to the ATB team for the partnership and their role in facilitating this substantial backing, which demonstrates trust in Decibel's vision and execution capabilities.
The Loan Facilities are structured with adjustable interest rates over ATB’s benchmark rates, and they include standard financial covenants, ensuring the company’s ongoing compliance with necessary fiscal guidelines. Such arrangements highlight both lender confidence and Decibel's commitment to maintaining financial health.
In conclusion, Decibel Cannabis Company is poised to leverage this newly acquired credit facility to solidify its market leadership, foster innovation, and expand operations both within Canada and internationally. With the support of ATB Financial, Decibel is on a trajectory of promising growth, reflecting a well-thought-out financial strategy aimed at thriving in an increasingly competitive cannabis marketplace.
Topics Consumer Products & Retail）
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