On July 18, 2022 Canopy Growth Corporation closed its previously announced exchange transaction with certain holders of Canopy’s outstanding 4.25% unsecured senior notes due 2023 in order to reduce its debt obligations by approximately C$263 million in exchange for common shares and approximately C$5.4 million in cash for accrued and unpaid interest. Constellation Brands, Inc., through a wholly-owned subsidiary, participated in the transaction.
The purchase price was satisfied as follows: (a) on the initial closing, 35,662,420 Canopy shares were issued to the noteholders, other than Constellation, based on a price equal to USD$3.50 per Canopy share, which was the closing price of the Canopy shares on the Nasdaq Global Select Market on June 29, 2022; and (b) on the final closing 11,896,536 Canopy shares were issued to the noteholders, other than Constellation, based on the volume-weighted average trading price of the Canopy shares on the Nasdaq for the 10 consecutive trading days beginning on, and including, June 30, 2022, being USD$2.6245. In addition, on the final closing, 29,245,456 Canopy shares were issued to Constellation based on a price per Canopy share equal to the averaging price.
Pursuant to the transaction, Canopy acquired and cancelled $100 million aggregate principal amount of the notes held by Constellation in exchange for 29,245,456 Canopy Shares, representing approximately 6.7% of the issued and outstanding Canopy shares on a non-diluted basis immediately prior to the final closing. Upon completion of the transaction, Constellation holds 171,499,258 Canopy shares, representing approximately 35.7% of the issued and outstanding Canopy shares on a non-diluted basis.
Cassels represented Canopy.