MIAMI - AYR Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF), a prominent U.S. cannabis company, has received the green light from the Ontario Superior Court of Justice and state cannabis regulators to proceed with its restructuring plan. This plan, under a statutory arrangement, involves the exchange of senior secured notes and the issuance of new shares and warrants.
The arrangement, set to close around February 7, 2024, includes the exchange of the company's existing 12.50% senior secured notes due December 10, 2024, for new 13.0% senior secured notes maturing on December 10, 2026. These new notes will be issued by AYR Wellness Canada, a wholly-owned subsidiary, and will be guaranteed by AYR Wellness and its subsidiaries.
In addition to the note exchange, approximately 24.9% of the company’s pro forma fully-diluted capital will be represented by subordinate, restricted, or limited voting shares issued to the holders of the new exchanged notes. Furthermore, approximately 16.5% of the pro forma fully-diluted capital will be represented by Anti-Dilutive Warrants issued to shareholders on record as of February 5, 2024.
AYR Wellness Canada will also issue $50 million in aggregate principal amount of additional 13.0% senior secured notes due December 10, 2026, subject to a 20% original issue discount. As part of the backstop commitment, approximately 5.1% of the pro forma fully-diluted capital in subordinate voting shares will be issued to a backstop party.
The company's management information circular, dated November 15, 2023, provides further details on the arrangement and was distributed to senior note holders for the special meeting held on December 15, 2023.
AYR Wellness, with over 90 licensed dispensaries, operates as both a retailer and a producer of cannabis consumer packaged goods. The company emphasizes its commitment to high-quality products and corporate responsibility.
The completion of the arrangement remains subject to certain conditions, and no assurance can be given that it will be finalized as planned. Moelis (NYSE:MC) & Company LLC and Stikeman Elliott LLP, along with Weil Gotshal & Manges LLP, are advising AYR Wellness, while Ducera Partners LLC, Goodmans LLP, and Paul Hastings LLP are advising the supporting senior note holders.
InvestingPro Insights
As AYR Wellness Inc. (AYRWF) navigates through its restructuring plan, investors and stakeholders are keeping a close eye on the company's financial health and market performance. According to real-time data from InvestingPro, AYR Wellness has a market capitalization of $266.8 million, reflecting the company's current valuation in the market. Despite a challenging financial year with a Price/Earnings (P/E) ratio of -1.09, the company has shown resilience with a revenue growth of 21.09% over the last twelve months as of Q3 2023. This growth is indicative of AYR Wellness's ability to increase its sales and potentially enhance its market position.
An InvestingPro Tip worth noting is that AYRWF operates with a significant debt burden, which is a key consideration for investors as the company proceeds with its exchange of senior secured notes. Additionally, the stock price has experienced volatility, yet it has also seen a strong return over the last year with a 169.32% price total return. These insights could be pivotal for investors assessing the risk and potential of AYRWF's restructuring plan and future prospects.
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