Cannabis company Hexo Corp. says it is postponing its fourth-quarter earnings release as it announces a $70 million private placement of convertible debentures led by a group of investors, including its chief executive.
The Gatineau-based company says that in light of this financing and additional time needed to finalize its year-end filings, Hexo will push back its earnings release to Oct. 28 and its conference call to Oct. 29.
Hexo says in a release that it has entered into subscription agreements with a group of investors, including CEO Sebastien St-Louis, directors and other long-term shareholders, that have agreed to purchase on a private placement basis $70 million of unsecured convertible debentures of the company.
The company says that it intends to use the net proceeds of the private placement for working capital and general corporate purposes.
After closing, the debentures will bear eight per cent interest and mature three years after its issuance, and after one year will be convertible into common shares of Hexo at a conversion price of $3.16. Shares of Hexo, which were halted earlier pending news, were up roughly five per cent to $3.57 in afternoon trading on the Toronto Stock Exchange.
Hexo was scheduled to release its fourth-quarter and full year results on Oct. 24, and earlier this month the cannabis company reduced its net revenue forecast for the fourth quarter to between $14.5 million to $16.5 million, down from roughly $26 million it had signalled previously.