Tilray Inc (NASDAQ: TLRY) has entered into an agreement to exchange $72.9 million worth of its convertible notes to that of common stock. The transaction is said to have been privately negotiated with certain holders of its outstanding 5.0% convertible senior notes.
The debt will convert to 6.4 million common shares of the issuer, given the debt an effective conversion rate of $11.39 per common share. The company notes that the company effectively negotiated to redeem the debt at a 42% discount to the face value of the equity, given that the most recent market price of the equity was $6.68 at the time of issuance.
What the company does not say is that this effectively means the holder of the debt is likely rather bearish on the long term prospects of the company and is happy receiving any figure for their stake.
Sponsored · Emerita Resources Corp.
The exchange transaction is expected to occur by November 25, subject to closing conditions. In aggregate, $277.9 million in convertible notes are expected to be outstanding following the close of the transaction, with the transaction expected to reduce annual cash interest payments by $3.6 million.
Tilray Inc last traded at $6.68 on the Nasdaq.
Information for this briefing was found via Sedar and Tilray. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
