Sundial Growers (NASDAQ: SNDL) has again failed to close on certain financial transactions during the duration of the outstanding waivers granted by its creditors. The company as a result announced after hours today that it has not seen the waivers granted a further extension, however the firm is currently in discussions for the modification of certain covenants related to its credit agreements.
The waivers in question are related to certain credit facilities held by the company, with debt totaling more than $177.9 million as of March 30, 2020. As part of the terms of the waiver, Sundial was required to sell its Bridge Farm UK asset which it acquired just last year, while booking a significant loss on the purchase in the process. The company today indicated that it is in advanced discussions for the potential sale of the property, however further details were not provided.
Further, Sundial also revealed today that it is currently working with its creditors to amend certain covenants and terms to enable the company to continue to operate without defaulting on the debt. In the interim, the company does not currently have waivers in place for not meeting these covenants, however it has been indicated by senior lenders that they don’t intend to issue a notice of default as of yet. Should discussions break down however, that sentiment may change.
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Lastly, the company also forewarned that if they fail to sell the Bridge Farm UK asset, or fail to amend the terms of outstanding credit facilities, then it is likely that significant trouble lay ahead for the future of the company. Specifically, Sundial stated, “in such a case, the Company would look to alternative sources of financing, delay capital expenditures and/or evaluate potential asset sales, and potentially could be forced to curtail or cease operations or seek relief under the applicable bankruptcy or insolvency laws.”
Sundial Growers last traded at $0.49 on the Nasdaq.
Information for this briefing was found via Sedar and Sundial Growers. 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.
