Decibel Cannabis Company Inc (TSXV:DB) (OTCQB:DBCCF) announced Friday that it has entered into an amended and restated commitment letter with connectFirst Credit Union Ltd. in respect of $54 million of debt capital over an initial 5-year term.
Based in Calgary, Alberta, the cannabis producer reported that the sum includes $40.5 million of term debt, a $6 million authorized overdraft secured against government receivables and an accordion line of $7.5 million.
The proceeds combined with contributions from operations are expected to provide sufficient liquidity to repay the company’s convertible debentures on maturity.
“With this refinancing, Decibel has added financial flexibility to optimize its capital structure and is well-positioned to continue to execute its aggressive growth strategy,” Stuart Boucher, Decibel’s CFO said. “This transaction reflects the strong position Decibel has established in the Canadian cannabis market and the continued confidence from connectFirst and our team in the execution of the Company’s strategic plan.”
Decibel expects to close the transaction on or before Jan. 31, 2022.
Decibel’s existing term debt will be increased by $12 million to $40.5 million, amortized over 12-years.
The credit facilities include a $7.5 million accordion to support future growth initiatives as Decibel continues to scale. Its availability is subject to Decibel achieving specific milestones.
The company continues to receive industry-leading interest rates that reflect the strength of its business.
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DBCCF Price Action
Decibel’s shares traded 0.54% higher at $0.1155 per share at the market close on Thursday.