(Calgary) Sundial Growers has agreed to make a shell bid to acquire cannabis producer Zenabis, which filed for court protection from creditors last week.
Posted yesterday at 3:09 p.m.
The agreement will set a minimum acceptable offer for the activities and assets of the Zenabis group.
Zenabis, a wholly-owned subsidiary of cannabis company Hexo, is restructuring under the Companies’ Creditors Arrangement Act (CCAA).
In December 2020, Sundial announced the acquisition of an investment that held $58.9 million in senior secured debt from Zenabis Group. The principal outstanding was 51.9 million as of June 16, 2022.
Assets covered by Monday’s deal include an indoor cultivation facility in Atholville, New Brunswick, with an annual production capacity of approximately 46,000 kilograms of dried cannabis and an extraction capacity of 15,000 kilograms.
The agreement also includes a disused indoor facility in Stellarton, Nova Scotia, which was used as a packaging, processing and manufacturing facility for value-added cannabis products.
“We are committed to creating continuity for the businesses and employees of the Zenabis Group and to assisting Zenabis in good faith with its restructuring,” Sundial CEO Zach George said in a statement.