Alcanna Announces New Revolving Credit Facility
May 5th, 2019
EDMONTON, Alberta, May 01, 2019 (GLOBE NEWSWIRE) — Alcanna Inc. (the “Company” or “Alcanna”) (TSX: CLIQ) today announced that it has entered into a new senior secured $70 million asset-based revolving credit facility (the “Credit Facility”) with Canadian Imperial Bank of Commerce (“CIBC”) acting as the sole lender. The Credit Facility also includes an uncommitted $15 million borrowing availability expansion feature. This new Credit Facility, which has a term of three years, replaces the Company’s prior credit agreement, which was scheduled to expire in September 2019. At the time of closing, there were no draws on either the new Credit Facility or the prior credit agreement.
“This new credit facility was designed to fit our company’s needs as we execute on transforming Alcanna to a growth company. Using an asset-based loan structure provides maximum flexibility to invest in both capital and margin initiatives targeted at strengthening the business on many fronts,” said James Burns, Vice Chair and CEO of Alcanna. “Not being tied to cash flow covenants and other tests allows Alcanna to invest in areas which will provide the best medium to long term return for shareholders versus having to accommodate short-term targets.”
The Company plans to use the Credit Facility to: finance investments in new Wine and Beyond stores in Alberta, BC and Ontario if the Ontario government’s reform of liquor retail so permits; continue to build out Nova Cannabis locations in Alberta, Ontario and BC as cannabis supply improves and licenses are again made available; finalize the renovation and upgrade of Liquor Depot stores in Alberta and BC and Brown Jug stores in Alaska; provide financing to the Canadian Liquor Retailers Alliance to fund its growth and expansion as the leading discount retailer in Alberta; and for general corporate and working capital purposes.
The new Credit Facility will carry interest of prime plus 0% which is lower than the prior credit agreement which was prime plus a range of 0.25% to 1.50%. The $70 million limit is subject to the availability constraints of the borrowing base, which is comprised of credit card balances in transit and eligible inventories, as defined in the credit agreement. The Credit Facility is repayable at any time without penalty.
ABOUT ALCANNA INC.
Alcanna is one of the largest private sector retailers of alcohol in North America and the largest in Canada by number of stores – operating 235 locations in Alberta, British Columbia and Alaska. The Company also operates six cannabis retail stores under the “Nova Cannabis” brand, with five locations in the Province of Alberta and one the Province of Ontario. With revenues in excess of $600 million per year, Alcanna processes over 18 million individual retail transactions of beverage alcohol and cannabis.
Alcanna’s common shares and convertible subordinated debentures trade on the Toronto Stock Exchange under the symbols “CLIQ” and “CLIQ.DB”, respectively.
This news release contains forward-looking statements or information (collectively “forward-looking statements”) within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “continue”, “anticipate”, “will”, “should”, “plan”, “intention”, and similar words suggesting future events or future performance. All statements and information other than statements of historical fact contained in this news release are forward-looking statements. In particular, this news release contains forward-looking statements pertaining to implementing the Company’s strategy and objectives related to growth.
With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things: the ability of management to execute the Company’s strategic plan and growth strategy, including its capital allocation strategy and specifically its ability significantly grow its cannabis retail store locations and enhance profitability of its liquor business.
Although the Company believes that the expectations reflected in the forward-looking statements, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations and assumptions will prove to be correct. Readers should not place undue reliance on forward-looking statements included in this news release. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that may cause actual performance and financial results to differ materially from any estimates, forecasts or projections. These risks and uncertainties include, among other things, These risks and uncertainties include, among other things: the risk that we will be unable to execute our strategic plan and growth strategy, including the capital allocation and retail cannabis strategy, as planned without significant adverse impacts from various factors beyond our control; dependence on suppliers; potential delays or changes in plans with respect to capital expenditures and the availability of capital on acceptable terms; risks inherent in the liquor retail and cannabis industries; competition for, among other things, customers, supply, capital and skilled personnel; changes in labour costs and markets; incorrect assessments of the value of acquisitions; general economic and political conditions in Canada (including Alberta), Alaska and globally; industry conditions, including changes in government regulations; fluctuations in foreign exchange or interest rates; unanticipated operating events; failure to obtain regulatory and third‐party consents and approvals when required; changes in tax and other laws that affect us and our security holders; the potential failure of counterparties to honour their contractual obligations; stock market volatility; and the other factors described in the Company’s public filings (including the Annual Information Form) available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking statements contained in this news release are made as of the date hereof. Except as expressly required by applicable securities legislation, Alcanna does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
For Further Information
EVP Corporate Services and Chief Financial Officer
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