(Leamington) Cannabis producer Tilray Brands has signed a definitive agreement as part of its proposed strategic plan with rival Hexo, announced last month.
Posted at 11:52
The agreement provides that Tilray will acquire the outstanding US$193 million senior secured convertible notes that were issued by Hexo and are held by funds affiliated with HT Investments (HTI).
The notes will be amended to include conversion rights at a price of 85 cents Canadian per Hexo share, a price which implies that Tilray Brands would have the right to convert the notes into a 35% equity interest in Hexo.
Hexo will not receive any proceeds as a result of Tilray Brands’ purchase of tickets from HTI.
When the proposed plan was announced on March 3, Tilray said it would acquire up to US$211 million in senior secured convertible notes which would be amended to include conversion rights at a price of 90 cents Canadian per share. ‘Hexo.
The deal will also see Tilray and Hexo form a joint venture to provide shared services to the two companies. They estimate that the total savings, which will be shared equally, should reach CAN 50 million within two years.