Nabis Holdings Inc. (CSE:NAB) has announced certain changes to its capital structure which will see it sell its holding of Verano Holdings Corp. (CSE:VRNO, OTCQX:VRNOF) voting shares for $17.49 million
Under a proposal issued under the Senior Unsecured Notes Indenture made among the company, Odyssey Trust Company and certain guarantors dated January 26, 2021 - and amended on April 1, 2021 - and received from over 75% of the holders of Nabis's 5.3% Senior Unsecured Notes due 2023, Nabis will enter into a series of transactions that would have the effect of selling all of the subordinate voting shares of Verano Holdings owned. by it to Caravel CAD Fund Ltd. for consideration of $17,495,705.
The company would also acquire all of the outstanding Senior Unsecured Notes due 2023 for an aggregate consideration of $16,962,500, representing $73.75 per $100 principal amount of the debentures outstanding, on an “interest flat” basis under a plan of arrangement to be filed by the company in proceedings to be commenced under the British Columbia Business Corporations Act.
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Nabis said that, if completed, the transaction will substantially de-risk the company by discharging its remaining indebtedness and eliminating its exposure to the market price of the Class A subordinate voting shares of Verano Holdings on favourable terms.
The company said its board of directors has considered the transaction and has determined that it is consistent with the company’s strategy of discharging its remaining liabilities and positioning Nabis in a manner that will allow it to pursue the creation of tangible value for its shareholders.
Accordingly, the Nabis board has unanimously resolved to pursue the transaction and holders representing more than 75% of the notes have also entered into binding, irrevocable commitments to support the transaction.
The transaction will be subject to certain conditions, including noteholder approval, the approval of shareholders, the approval of the British Columbia Superior Court and other conditions customary for a transaction of this nature.
The Transaction constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (MI 61-101) as Caravel CAD Fund Ltd. is the owner of more than 10% of the issued and outstanding common shares of the company.
Nabis Holdings is a Canadian investment issuer that invests in assets across multiple industries.
Contact the author at jon.hopkins@proactiveinvestors.com