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MediPharm Labs Closes New $38.7 Million Upsized Credit Facility with a Top 5 Canadian Schedule 1 Bank to Support Growth
October 10, 2019
Source: Globe Newswire
MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ) (“MediPharm Labs” or the “Company”) a global leader in specialized, research-driven cannabis extraction, distillation, purification and cannabinoid isolation, is pleased to announce its wholly-owned subsidiary, MediPharm Labs Inc. (“MediPharm”) has closed a credit agreement (the “Credit Facility”) with a top 5 Canadian Schedule 1 bank (the “Bank”) for an aggregate $38.7 million. The Credit Facility was upsized from the previously announced committed term sheet of $20.0 million, and is comprised of a revolving term facility, a non-revolving term facility and a non-revolving delayed draw term facility.
“With the successful upsizing of our Credit Facility and the proceeds from our recent $75 million bought deal equity offering, we have strengthened our balance sheet and our ability to execute our global business plan to efficiently seize the growth opportunities before us,” said Pat McCutcheon, Chief Executive Officer of MediPharm Labs. “In particular, this enlarged facility will enhance liquidity and support the delivery of our stated Canadian and Australian capex strategy, to ramp up of production capacity to meet contracted and expected demand for our new product classes.”
The Company’s $38.7 million Credit Facility was upsized from the previously announced committed term sheet of $20.0 million. The revolving term facility is for up to $25.0 million subject to the Company’s borrowing base, can be drawn in Canadian or Australian dollars, has a 1-year term and is to be used for Canadian and Australian working capital. The $5.7 million non-revolving term facility was fully drawn on closing, has a 3-year term and was used to refinance and reduce the interest expense of an existing mortgage. The non-revolving delayed draw term facility of up to $8.0 million has a 3-year term and is to be used to fund capital expenditures.
“MediPharm Labs has distinguished itself in the cannabis industry as a diverse, profitable, risk-managed growth company,” said Mr. McCutcheon. “The closing of the Credit Facility required extensive due diligence of our current production site and capabilities, along with a detailed review of our Company’s expected revenue growth, liquidity and regulatory compliance. The Credit Facility will add to our strong balance sheet to assist us in executing on our business strategy and accelerating our domestic and international expansion strategies.”
The Credit Facility will bear interest at the Bank’s prime lending rate plus a certain per cent per annum dependent upon the Company’s debt to EBITDA ratio. The Credit Facility has a first ranking general security interest in the Company’s assets and can be repaid without penalty.
About MediPharm Labs Corp.
Founded in 2015, MediPharm Labs specializes in the production of purified, pharmaceutical-grade cannabis oil and concentrates and advanced derivative products utilizing cGMP (current Good Manufacturing Practices) designed facility and ISO standard built clean rooms. MediPharm Labs has invested in an expert, research-driven team, state-of-the-art technology, downstream purification methodologies and purpose-built facilities with 5 primary extraction lines having 300,000 KG of annual processing capacity to deliver pure, safe and precisely-dosed cannabis products for its customers. Through the Company’s wholesale, private and white label platform, MediPharm Labs formulates, processes, packages and distributes active pharmaceutical ingredients and advanced cannabinoid-based products to domestic and international markets. As a global leader, MediPharm Labs has completed commercial exports to Australia and is nearing completion of its Australian extraction facility expected in 2019 with 75,000 KG of annual processing capacity.
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