Aurora Cannabis closes offering of convertible senior notes

Aurora Cannabis has closed its previously announced offering of 5.5% convertible senior notes due 2024 for gross proceeds of $345 million (including $45 million pursuant to the exercise of the initial purchasers’ over-allotment option).

The notes were issued at par value.

Aurora expects to use the net proceeds from the offering of the notes to support its Canadian and international expansion initiatives, for future acquisitions and for general corporate purposes, including working capital requirements to continue the Company’s accelerated growth.

The notes are unsecured and will mature on February 28, 2024. The notes bear cash interest semi-annually at a rate of 5.5% per annum.

The initial conversion rate for the notes is 138.37 common shares per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately US$7.23 per common share.

The initial conversion rate represents a premium of approximately 10% to the common share closing sale price on the New York Stock Exchange on January 17, 2019 and is subject to adjustment in certain events.

Upon conversion, the notes will be settled in cash, Aurora common shares or a combination of cash and Aurora common shares, at Aurora’s election.

“These convertible notes offer Aurora the flexibility and optionality to settle the entire principal amount of the notes in the future for cash, shares, or combination thereof.”

Terry Booth, Aurora

Aurora has the right to redeem the notes in certain circumstances after February 28, 2022 at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest.

Holders also have the right to require Aurora to repurchase their notes upon the occurrence of certain customary events at a purchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest.

This announcement is neither an offer to sell nor a solicitation of an offer to buy the notes or the common shares of Aurora into which the notes are convertible and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

Aurora CEO Terry Booth said: “These convertible notes offer Aurora the flexibility and optionality to settle the entire principal amount of the notes in the future for cash, shares, or combination thereof.

“The transaction signals confidence in our expected future performance and recognition that we have deployed our shareholders’ capital in an intelligent way.”Cannabis Business Worldwide

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