AYRWF - AYR Announces (1) Agreement with Senior Noteholders to Extend Maturity Date by Two Years (2) Commitment for US$50 million of New Money Financing and (3) Amendment to LivFree Wellness LLC Promissory Note | Benzinga
- Upon completion of the Transactions (defined below) and when combined with the previously announced contingent agreements with certain seller noteholders, AYR will have retired or extended the maturity of nearly US$400 million in debt for an additional two (2) years
- Upon completion of the Transactions, AYR's Senior Noteholders and the Backstop Party will collectively receive equity representing 30% of the issued and outstanding shares of the Company on a fully-diluted and pro-forma basis (or 25% assuming the exercise of the Anti-Dilutive Warrants (defined below))
- In addition to debt maturity extensions, AYR has received a commitment for US$50 million of new money debt financing, which will be backstopped by one of the existing Senior Noteholders and, if funded, would result in US$40 million of cash proceeds to AYR
- The Transactions are supported by 76% of Senior Noteholders, which, upon completion, shall bind all Senior Noteholders to the two (2) year extension
- New warrants exercisable for two years at US$2.12 per share will be issued to existing shareholders
MIAMI, Nov. 01, 2023 (GLOBE NEWSWIRE) -- AYR Wellness Inc. (CSE:AYR, OTCQX:AYRWF) ("AYR" or the "Company"), a leading vertically integrated U.S. multi-state cannabis operator, today announced that it entered into a transaction support agreement on October 31, 2023 (the "Support Agreement") with the holders of approximately 75% (collectively, the "Majority Noteholders") of the aggregate outstanding principal amount of the Company's 12.5% senior notes due December 2024 (the "Senior Notes"), pursuant to which the Majority Noteholders have agreed to support a transaction under which: (i) all of the Senior Notes would be exchanged for an equivalent principal amount of new 13% senior secured notes (the "13% Senior Notes") due December 10, 2026 (the "Exchange Transaction"); (ii) the Majority Noteholders will be offered the opportunity to participate in the issuance of additional 13% Senior Notes in an aggregate principal amount of US$50 million (the "New Money Notes") (subject to 20% original issue discount) concurrent with the completion of the Exchange Transaction; (iii) the offering of the New Money Notes will be backstopped by one of the Majority Noteholders, in exchange for which such backstop party will on closing receive a backstop premium payable in the form of subordinated, restricted or limited voting shares in the Company representing in the aggregate 5.1% of the outstanding shares on a fully-diluted and pro-forma basis (or non-voting shares in one of the Company's subsidiaries representing the equivalent value to 5.1% of the outstanding shares of the Company on a fully-diluted and pro forma basis) (the "Backstop Premium"); and (iv) recipients of 13% Senior Notes will also concurrently receive subordinated, restricted and limited voting shares (the "New Shares") representing in the aggregate 24.9% of the issued and outstanding shares of the Company on a fully-diluted and pro-forma basis (or 20.8% of the outstanding shares assuming the exercise of the Anti-Dilutive Warrants (as defined below) (collectively, the "Transactions").
In addition, as described below, new warrants (the "Anti-Dilutive Warrants") would be issued at closing to all then-existing shareholders (excluding recipients of the New Shares and the Backstop Premium) and would be exercisable for shares at a price of US$2.12 per share for two years following closing.
The Transactions will also be subject to approval by the Ontario court pursuant to a plan of arrangement (the "Plan") commenced under the Canada Business Corporations Act (the "CBCA"). The Transactions will be subject to customary terms and conditions, including approval by the requisite majority of holders of Senior Notes and the receipt of required approvals from applicable state cannabis regulators.
The Company also announced today that it has entered into an agreement with LivFree Wellness, LLC ("LivFree") to amend certain terms of the promissory note dated May 24, 2019 (the "LivFree Note") executed in connection with the Company's acquisition of LivFree. The amendments to the LivFree Note will provide, among other things, a principal payment of US$3 million upon closing of the Transactions and a deferral of the maturity of the remaining US$17 million of principal and approximately US$5 million of accrued PIK interest for a period of two (2) years to May 24, ...