Alberta-based Aurora Cannabis Inc. (NASDAQ:ACB) (TSX:ACB) has entered into an agreement with investment bank Canaccord Genuity to sell 46,250,000 of its shares at C$0.73 each, generating approximately C$33.8 million. The deal was announced on Thursday, with the possibility of gross proceeds increasing to an estimated C$38.8 million if an option for Canaccord Genuity to purchase up to an extra 6,937,500 shares is fully exercised.
The primary use of the funds will be to settle around US$25 million of Aurora's debt. According to InvestingPro data, Aurora operates with a moderate level of debt and has been unprofitable over the last twelve months, with an operating income, adjusted for the last twelve months, of -135.44M USD.
Any remaining funds may be directed towards strategic initiatives, potentially including acquisitions. However, it's crucial to note that Aurora's stock price movements are quite volatile, as per InvestingPro Tips. Over the last year, the price has fallen by 48.68%, but there have been strong returns over the last month and three months at 51.61% and 26.34% respectively.
The deal is still pending approval from the Toronto Stock Exchange and is expected to close by October 3, 2023. This financing move aligns with Aurora's objective to repay the remainder of its outstanding convertible senior notes at or prior to maturity. The transaction is subject to customary conditions, including approvals from the Toronto Stock Exchange. A prospectus supplement will be filed with the securities commissions or securities regulatory authorities in each of the provinces of Canada, except Quebec.
Aurora Cannabis Inc., a pioneer in global cannabis, serves both medical and consumer markets. The company's adult-use brand portfolio includes Aurora Drift, San Rafael ’71, Daily Special, Whistler, Being and Greybeard. Medical cannabis brands include MedReleaf, CanniMed, Aurora and Whistler Medical Marijuana Co. Aurora also has a controlling interest in Bevo Farms Ltd., North America’s leading supplier of propagated agricultural plants.
Investors interested in Aurora should be aware that the company does not pay a dividend to shareholders, as noted in the InvestingPro Tips. For more insights like these, consider subscribing to InvestingPro, which offers a wealth of additional tips and real-time metrics for companies like Aurora. You can check out the service here.
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