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Friday, Jun 2, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Valens enters into $40M secure credit facility

The accordion loan can expand up to another $10 million

Valens enters into $40M secure credit facility

Leading extractor Valens GroWorks Corp. (TSX: VLNS) has gotten a new source of secured funding to expand its operations.

In a statement Monday, the company said it had entered into a syndicated credit facility with CIBC and ATB Financial for $40 million.

Stock in the company slumped slightly to $2.58 on the day, but has been up more than 16 per cent over the past month.

The facility is made up of a $20 million secured term loan, and a $20 million secured revolving loan with an accordion feature to increase the total amount by another $10 million. According to the statement, the facility has a three-year term and is secured by a first ranking charge over “substantially all the company’s assets.”

Valens says the proceeds from the loans will allow for the continued expansion of its operations and execution of its corporate strategy, which includes gaining access to new domestic and global opportunities.

Although CEO Tyler Robson says his company is already well-capitalized, the credit facility will increase Valens’s financial flexibility and bring down its overall weighted average cost of capital.

“With our enhanced balance sheet, we are well positioned to continue to expand our innovative product portfolio, build out our custom manufacturing platform, be opportunistic in a consolidating market and maximize capital allocation to generate the highest return on invested capital for our shareholders,” Robson said.

In its latest earnings report, Valens reported revenue rising to $32 million in the latest fiscal quarter, and adjusted earnings before interest, taxes, depreciation and amortization of $14.3 million.

Read more: Revenues grow while earnings slow for Valens

In April, Valens said it was producing and donating 40,000 bottles of hand sanitizer to frontline health care workers in B.C., Alberta and Ontario. The company said it planned to give 10,000 bottles to public-facing workers at Shoppers Drug Mart pharmacies across Canada.

Top image via Valens


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