BMMJ - Bengal Capital - Body And Mind: Smartly Getting Away From Toxic Leverage

2024-02-10 04:20:00 ET

Summary

• Body and Mind smartly divested assets to get away from toxic leverage - its secured lender was fully repaid.
• With BMMJ, when we took the position we felt reasonably comfortable that the company was trading below the value it would fetch in an orderly liquidation.
• We believe BaM's actual value will more likely be determined not by how much shareholders get when it's parted out, but about efficiently utilizing the assets.

The following segment was excerpted from this fund letter.

Body and Mind ( OTCQB:BMMJ , CSE:BAMM)

Body and Mind ('BaM') is a significantly different company from where it started the year because it has smartly divested assets to get away from toxic leverage. Over the course of 2023, it became apparent that BaM's senior lender was not particularly collaborative nor forward looking, which meant that the company had to prioritize debt repayment so it could unlock further value. By selling its Ohio assets, BaM was able to do just that - its secured lender was fully repaid ~$7.3mm in October 2023....

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