LEAMINGTON, ON, April 17, 2019 /CNW/ - Aphria Inc.
("Aphria" or the "Company") (TSX: APHA and NYSE:
APHA) today announced the pricing of US$300
million aggregate principal amount of 5.25% convertible
senior notes due 2024 (the "notes") 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. Aphria also
granted the initial purchasers of the notes an option, exercisable
within a 30-day period, to purchase up to an additional
US$50 million aggregate principal
amount of notes. The sale of the notes to the initial purchasers is
expected to settle on April 23, 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 will be 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
last reported sale price of US$7.82
per common share of Aphria on the New York Stock Exchange on
April 17, 2019.
Prior to the close of business on the business day immediately
preceding December 1, 2023, the notes
will be convertible at the option of the holders only upon the
satisfaction of specified conditions and during certain periods. On
and after December 1, 2023 until the
close of business on the business day immediately preceding the
maturity date, holders may convert their notes at their option
regardless of these conditions.
Holders may require Aphria to repurchase their notes upon the
occurrence of a "fundamental change" (as defined in the indenture
governing the notes) at a cash repurchase price equal to 100% of
the principal amount of the notes to be repurchased, plus accrued
and unpaid interest to, but excluding the repurchase date.
Aphria may not redeem the notes prior to June 6, 2022, except upon the occurrence of
certain tax-related events. On or after June
6, 2022, Aphria may redeem for cash all or part of the notes
if the last reported sale price of Aphria's common shares has been
at least 130% of the conversion price then in effect for at least
20 trading days (whether or not consecutive) during any 30
consecutive trading day period (including the last trading day of
such period) ending on, and including, the trading day immediately
preceding the date on which Aphria provides a notice of redemption.
Aphria may also redeem for cash all but not part of the notes, at
Aphria's option, subject to certain conditions, upon the occurrence
of certain tax-related events. Redemptions of notes in either case
shall be at a redemption price equal to 100% of the principal
amount of the notes to be redeemed, plus accrued and unpaid
interest to, but excluding the redemption date. In
addition, following certain "make-whole fundamental changes" (as
defined in the indenture governing the notes) occurring prior to
the maturity date of the notes or upon the Aphria's issuance of a
notice of redemption, Aphria will increase the conversion rate for
holders of the notes who elect to convert their notes in connection
with that make-whole fundamental change or during the related
redemption period.
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.
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 offering of the notes,
prevailing market conditions, 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.
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SOURCE Aphria Inc.