Very Good Food Company signs term sheet of $ 70 million secured credit facility
The Very Good Food Company (CSE: VERY) clearly needs capital. The company announced this morning that it has executed a non-binding term sheet for a $ 70 million senior secured credit facility with an unnamed “senior institutional investor”.
The proposed credit facility will allow the Company to receive a $ 50.0 million asset-backed term loan, valid for a period of two years from the date of issue with an option to renew an year. A revolving line of credit of $ 20.0 million is also included, with all amounts drawn on the facilities to bear interest at 9.95% per annum, with the gun and term loan secured by current production equipment. and expected from the business.
The Arrangement will also see VERY issuance of 225,000 common share purchase warrants at a 25% premium over the current share price on the date of the first drawdown of the facility.
Proceeds from the facility are expected to be used to accelerate the commissioning of the first two production lines at the company’s California facility, at an estimated cost of $ 30.0 million. Here, the company will seek to scale up existing products that are already on the market. The funds are also to provide flexibility for the growth of sales of the company’s e-commerce platform in the United States and Europe, while also providing working capital.
The credit facility is expected to close by April 15, subject to due diligence and the signing of a definitive agreement.
The Very Good Food Company last traded at $ 5.72 on the CSE.
Information for this briefing was found via Sedar and The Very Good Food Company. The author has no affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author does not hold any license.
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