Imperial Brands Acquires Stake in Auxly Cannabis Group

LOS ANGELES- Imperial Brands has effectively become the largest shareholder of Auxly Cannabis Group, acquiring a 19.8% stake after converting over 123.4 million Canadian dollars ($90.6 million) in total debt into shares. This move was announced by Toronto-based Auxly Cannabis Group on Monday, highlighting the conversion of CA$123.4 million of principal and accrued interest from a 4% unsecured convertible debenture set to mature in September 2026.

The conversion resulted in Imperial Brands obtaining 150,433,450 common shares at an exercise price of 81 Canadian cents per share from the principal amount, and an additional 90,882,667 shares from roughly CA$1.56 million of accrued interest, priced at CA$0.17 per share.

Furthermore, the two companies have mutually decided to end the exclusivity clause, which previously required Imperial to engage solely with Auxly as its cannabis partner. This partnership initially began in 2019.

Auxly’s CEO, Hugo Alves, welcomed Imperial Brands as the company’s largest shareholder and lauded the conversion for significantly bolstering Auxly’s financial stance by eradicating CA$123 million in debt. This strategic financial maneuver is anticipated to slash the company’s 2024 annual interest and accretion expenses by approximately CA$14 million, enhancing Auxly’s commitment to achieving profitable growth and market presence through superior product offerings and collaborative team efforts.