The Valens Company (TSX:VLNS, OTCQX:VLNCF) Inc, a leading manufacturer of cannabis products, told investors it has entered into a secured non-revolving term loan with 2361380 Ontario Limited, a private institutional lender, for an aggregate principal amount up to C$40 million.
The Kelowna-based company said the loan will be used to further strengthen its balance sheet, allowing it to execute on its corporate strategy and fund working capital needs as the business continues its aggressive growth trajectory, as well as immediately retire the remaining $7.5 million outstanding under its existing debt facility.
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"With this strategic secured financing, Valens is now well-positioned to accelerate its aggressive growth strategy, further fund its Canadian operations, and capitalize on new growth opportunities as the company works toward expanding its presence in the United States,” CEO and chairman Tyler Robson said in a statement.
“This C$40 million term loan reflects the unique value proposition that Valens has created in the market, as well as the continued confidence from our management, board, and shareholders in the continued execution of our business plan.”
Valens said the loan will accrue interest at a rate of 10% per annum, payable quarterly, and matures on December 15, 2023, with an initial interest payment date on December 31, 2021.
"This is a very attractive cost of capital and a non-dilutive financing solution that provides more financial flexibility, fewer covenants and restrictions and better enables us to aggressively penetrate our target markets and create shareholder value,” Valens president Jeff Fallows added.
“This transaction not only funds our current business plan but also strengthens our balance sheet. As a result, we do not anticipate the need to raise additional equity capital in the near term."
The Valens Company (TSX:VLNS, OTCQX:VLNCF) is a leading manufacturer of cannabis products with a mission to bring the benefits of cannabis to the world. It provides proprietary cannabis processing services, in addition to product development, manufacturing, and commercialization of cannabis consumer packaged goods.
The company's products are formulated for the medical, health and wellness, and recreational consumer segments, and are offered across all cannabis product categories with a focus on quality and innovation.
Contact the author at stephen.gunnion@proactiveinvestors.com