The weed wireAphria renegotiates debt, lays off marketing boss

CEO Irwin Simon told BNN Bloomberg it's laying off a dozen staff including its chief marketing officer
Nick Laba Nick LabaMay 8, 20205 min

Aphria Inc. (TSX: APHA and NYSE: APHA) announced a favourable restructuring of some of its debt, while news emerged of some internal restructuring unfavourable for one of its top employees.

On Friday, the major weed player said it’s repurchasing $127.5 million in convertible debt at a 25 per cent discount of its face value. The move is the result of a number of privately negotiated agreements made to reduce the company’s debt and eliminate $6.7 million in annual interest costs.

“This transaction strengthens the company’s balance sheet by increasing its net cash position from $36.3 million CAD at its February 29, 2020 quarter-end to $163.8 million, on a pro-forma basis as at that date,” the company said in a statement.

The transactions — which involved around 18.7 million common shares and $2.9 million in interest payments — are exempt from registration under section 4(a)(2) of the Securities Act and by way of an exemption from the prospectus requirement afforded by OSC Rule 72-503 as promulgated under the Securities Act in Ontario, Aphria said.

Aphria’s former marketing chief Megan McCrae was let go this week. The company’s CEO says he has plans to change the way his company markets its products. Image via Twitter

Also on Friday, BNN Bloomberg reported that the company is laying off a dozen of its staff, including chief marketing officer Megan McCrae.

McCrae started at the company in 2016 as its director of marketing and communications, before transitioning to the VP of marketing role in January 2018. In September of last year, she took on her final job at the company as its marketing boss.

Before Aphria, McCrae held various senior positions at JTI-Macdonald Corp., a major tobacco company and maker of Export A cigarettes.

Aphria CEO Irwin Simon said the layoffs amounted to less than one per cent of his company’s 1,200 employees.

“I’m strategically changing our business and doing some consolidation,” Simon told BNN Bloomberg. “I’ve run businesses for 25 years and there are times when you look at how you strategically align your businesses.”

Shares in the company slid 7 per cent to $4.78 on the Toronto Stock Exchange.

Aphria was one of the few Canadian weed companies to post a profit in the first quarter of 2020.

Read more: Aphria remains profitable amid murk of insolvencies 

Top image via Aphria

 

nick@mugglehead.com

@nick_laba

 

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