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THC Global secures A$4 million debt facility to support medicinal cannabis production scale-up

Published: 05:19 30 Apr 2020 BST

THC Global Group Ltd - THC Global secures A$4 million debt facility to support medicinal cannabis production scale-up
The cash balance has been boosted without dilutionary equity raisings

THC Global Group Ltd (ASX:THC) (FRA:9TH) has secured an A$4 million debt facility to support the commercial production scale-up of medicinal cannabis-derived medicines from its Australian facility.

The debt facility is from Mitchell Asset Management, an ASIC licensed AFSL holder which provides bespoke funds management, investment and corporate advisory services.

Cash balance boosted

THC Global chief executive officer Ken Charteris said: “Taking advantage of our strong balance sheet, we’ve agreed to a $4 million debt facility, secured against our Southport Manufacturing Facility.

“By choosing to raise further funding by debt, we’ve been able to boost the company’s cash balance without dilutionary equity capital raisings in current market conditions.”

Commercial-scale production of medicinal cannabis medicines continues at the Southport facility, with the first 100%-Australian produced Canndeo branded medicines available for prescription to Australian patients from May 20, 2020.

Support for scale-up

Shares are up 3% to 33 cents, up from 19.5 cents at market close on March 30.

Charteris said: “Access to this additional capital will support our scale-up of commercial medicinal cannabis medicines production as we target supply to over 6,000 Australian patients through 2020 in addition to further developing our export pathways.”

Mitchell Asset Management facility

Mitchell Asset Management provides loans to companies that are expanding their products and services to manage cashflow, preserve equity and assist with growth.

The debt facility can be immediately drawn down by THC Global in full and is repayable on October 31, 2021, or earlier at the company’s election.

It is otherwise on standard commercial terms for similar debt facilities and is not convertible or able to be repaid in equity.

THC Global has also granted a mortgage over its Southport Manufacturing Facility and executed general security deeds for the company and its wholly-owned subsidiaries, THC Pharma Pty Ltd and Canndeo Limited.

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