Aphria Announces Closing of US$300 Million 5.25% Convertible Senior Notes Offering and Exercise of US$50 Million Initial Purchasers Option in Full
April 23, 2019
Leamington, Ontario – April 23, 2019 – Aphria Inc. (“Aphria” or the “Company”) (TSX: APHA and NYSE: APHA) today announced it has closed its offering of 5.25% convertible senior notes due 2024 (the “notes”) for gross proceeds of US$300 million in a private placement to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the “Act”), and outside the United States to non-U.S. persons in compliance with Regulation S under the Act.
On April 23, 2019, the initial purchasers exercised their option to purchase up to an additional US$50 million principal amount of notes in full, resulting in gross proceeds of US$350 million. The sale of the additional notes to the initial purchasers is expected to settle on April 26, 2019, subject to the satisfaction of customary closing conditions.
Aphria intends to use the net proceeds from this offering to support its international expansion initiatives, for future acquisitions and for general corporate purposes, including working capital requirements, in jurisdictions where federally and nationally legal.
The notes are senior unsecured obligations of Aphria and will accrue interest at a rate of 5.25% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2019. The notes will mature on June 1, 2024, unless earlier repurchased, redeemed or converted.
The initial conversion rate for the notes will be 106.5644 common shares of Aphria per US$1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately US$9.38 per common share). Conversions of the notes will be settled in cash, common shares of Aphria or a combination thereof, at Aphria’s election. The initial conversion price represents a conversion premium of approximately 20% over the sale price of US$7.82 per common share of Aphria on the New York Stock Exchange on April 17, 2019, the last reported trading day prior to the announcement of the pricing of the notes.
This news release is neither an offer to sell nor a solicitation of an offer to buy the notes or the common shares of Aphria into which the notes may be convertible and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
The offer and sale of the notes and any common shares of Aphria issuable upon conversion of the notes have not been registered under the Act or any state securities laws, or qualified for distribution by prospectus in Canada, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements, or sold in Canada absent an exemption from the prospectus requirements of Canadian securities laws.
Aphria is a leading global cannabis company driven by an unrelenting commitment to our people, the planet, product quality and innovation. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria has been setting the standard for the low-cost production of high-quality cannabis at scale, grown in the most natural conditions possible. Focusing on untapped opportunities and backed by the latest technologies, Aphria is committed to bringing breakthrough innovation to the global cannabis market. The Company’s portfolio of brands is grounded in expertly-researched consumer insights designed to meet the needs of every consumer segment. Rooted in our founders’ multi-generational expertise in commercial agriculture, Aphria drives sustainable long-term shareholder value through a diversified approach to innovation, strategic partnerships and global expansion, with a presence in more than 10 countries across 5 continents.
For more information, visit: aphria.ca
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Katie M. Turner
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “potential”, “believe”, “intend” or the negative of these terms and similar expressions. Forward-looking statements in this news release include, but are not limited to, statements regarding the satisfaction of customary closing conditions with respect to the sale of additional notes, the anticipated use of net proceeds of the offering of the notes, which could change as a result of market conditions or for other reasons, and the impact of general economic, industry or political conditions in the United States, Canada or internationally. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally, income tax and regulatory matters; the ability of Aphria to implement its business strategies; competition; crop failure; currency and interest rate fluctuations and other risks identified in the Company’s public filings on SEDAR and EDGAR.
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws.
Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.