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SMITHS FALLS, Ontario - Cannabis company Canopy Growth Corporation (TSX:WEED) (NASDAQ:CGC), currently carrying a total debt of $242.13 million according to InvestingPro data, announced Tuesday it has reached an agreement with lenders to make three prepayments totaling US$50 million on its Senior Secured Term Loan by March 31, 2026.
The debt reduction plan includes a US$25 million payment scheduled for around July 31, followed by US$10 million by December 31, and US$15 million by March 31, 2026. The company expects these prepayments to reduce its annual interest expense by approximately US$6.5 million. With a current ratio of 3.12, InvestingPro data shows the company maintains strong short-term liquidity despite an EBITDA of -$14.79 million in the last twelve months.
"These prepayments reflect our continued focus on strengthening our balance sheet and lowering cash interest expense," said Luc Mongeau, Chief Executive Officer of Canopy Growth, in a press release statement.
The agreement also involves Canopy USA, LLC securing consent to provide an additional US$22 million in funding for Acreage Holdings, Inc. and its subsidiaries, which required approval from Canopy Growth’s lenders.
Canopy Growth operates in the cannabis sector with brands including Tweed, 7ACRES, DOJA, Deep Space and Claybourne, along with vaporization devices by Storz & Bickel. The company maintains cannabis operations in Canada, Germany, Poland, and Australia, while holding a non-controlling interest in Canopy USA, which has connections to various U.S. cannabis businesses.
The debt reduction initiative comes as part of the company’s strategy to create financial flexibility for future growth opportunities. For deeper insights into Canopy Growth’s financial health and detailed analysis, including 10 key investment tips and comprehensive valuation metrics, explore the full company report on InvestingPro.
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