- Cann Group has disclosed that it has secured credit approval for a debt facility worth A$50 million debt from National Australia Bank (NAB).
- Debt funding with NAB clears the Company’s path to restart construction on the Mildura production facility.
- The Company stated that securing the support of a tier-one bank substantiates its strategic growth plans.
Following the significant announcement, CAN’s share price surged with the stock trading 14.516% higher at A$0.355 ( at AEDT 12:24 PM). The market capitalisation of Cann Group stood at A$83.67 million.
About Cann Group
Medical cannabis player Cann Group Limited is engaged in building a world-class business focused on breeding, cultivating, manufacturing, and supplying medicinal cannabis. The Company develops cannabis products for sale and use within Australia as well as for approved overseas export markets.
Cann Group is commercialising several imported as well as locally sourced and produced medicinal cannabis formulations.
Cann Group Secures A$50 million Debt Facility Approval
On 23 November 2020, Cann Group revealed that it obtained credit approval for a A$50 million secured debt facility from National Australia Bank Limited. The Company anticipates completing execution of documentation with the Bank within the next month.
The loan is a construction facility which will be utilised for completion of the first stage of its state-of-the-art medicinal cannabis production site near Mildura. The loan is being provided via the agribusiness division of NAB and represents a robust endorsement of strategic growth plans of Can Group.
Mildura production facility expected to Start in February 2021
The Company notified that this debt funding clears the path to restart construction on its Mildura production facility. The work at Mildura facility is anticipated to be underway in February 2021.
The first-stage of Mildura has an estimated build time of nine months, with first product anticipated to be processed and released by March 2022.
Cann Group also notified that the first stage of the project would offer the annual capacity to deliver 12.5 kgs of dry flower equivalent.
Moreover, the total estimated cost for completing the initial stage is almost A$112 million, with Cann Group having already expended ~A$53 million on-site works and the facility superstructure. The balance of projected costs of about A$59 million will be funded through the current cash reserves and new bank loan facility.
Cann Group CEO Peter Crock stated that specialist overseas contractors had been cleared to arrive as part of the workforce remobilisation program in Australia in the new year.
Mr Crock also added-
ALSO READ: Has Cannabis Come of age to tackle COVID-19?