Calgary, AB (May 15, 2020) – Sundial Growers Inc. (Nasdaq: SNDL) ("Sundial" or the "Company") is pleased to announce it has reached an agreement to sell its U.K. asset, Bridge Farm Group (“Bridge Farm”), to a consortia of private investors that includes former management of Bridge Farm (collectively, the “Purchaser”) for a total consideration of approximately $90 million (the “Bridge Farm Disposition”). As consideration for the Bridge Farm Disposition, the Purchaser will (i) assume $45 million of debt under Sundial’s existing $115 million term debt facility (the “Term Debt Facility”), (ii) assume the contingent consideration liabilities related to the remaining earn-out and additional share obligations under the original Bridge Farm acquisition agreement, dated as of July 2, 2019, and (iii) cancel approximately 2,700,000 of Sundial common shares currently held by certain members of the Purchaser. Sundial will not receive any cash consideration in connection with the transaction.
“We are pleased to have reached an agreement to sell Bridge Farm as we work to restructure our business and bring focus to our operations,” said Zach George, Sundial’s Chief Executive Officer. “This divestiture will allow us to focus on our core strength in premium inhalable products for the Canadian recreational market. On close, our new management team will have reduced our run-rate annual cash obligations by more than $50 million and created a clear path to the equitization of our balance sheet. I would like to thank the Bridge Farm team for their leadership and courage in the face of COVID-19 as well as our lenders for their continued support.”
The Bridge Farm Disposition is subject to standard closing conditions and is further conditioned on Sundial restructuring the remaining $70 million under its Term Debt Facility and entering into a new syndicated credit agreement with the Company’s senior lenders on or before June 1, 2020. Any failure or delay in completing the Bridge Farm Disposition or Term Debt Facility restructuring will likely result in the acceleration of our outstanding debt and would have a significant negative impact on the Company’s liquidity and further impact the Company’s ability to operate as a going concern. In such a case, the Company would look to alternative sources of financing, delay capital expenditures and/or evaluate potential asset sales, and potentially could be forced to curtail or cease operations or seek relief under the applicable bankruptcy or insolvency laws.
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