Ayr Wellness majority holders agree to exchange 12.5% notes due 2024 for 13% notes due 2026

By Wendy Van Sickle

Columbus, Ohio, Nov. 1 – Ayr Wellness Inc. entered on Tuesday into a transaction support agreement with holders of about 75% of its 12.5% senior notes due December 2024, according to a news release.

These majority noteholders have agreed to support a transaction under which all of the 2024 notes would be exchanged for an equivalent amount of new 13% senior secured notes due Dec. 10, 2026 and under which the majority noteholders will be given the chance to participate in the issuance of $50 million of additional 13% senior notes at a 20% original issue discount.

The offering of new money notes will be backstopped by one of the majority noteholders, in exchange for a backstop premium payable in the form of subordinated, restricted or limited voting shares in the company representing 5.1% of the outstanding shares on a fully diluted and pro-forma basis.

Recipients of 13% senior notes will also concurrently receive subordinated, restricted and limited voting shares representing a total of 24.9% of the issued and outstanding shares of the company on a fully diluted and pro-forma basis, or 20.8% of the outstanding shares assuming the exercise of the anti-dilutive warrants.

The new anti-dilutive warrants would be issued at closing to all then-existing shareholders, excluding recipients of the new shares and the backstop premium, and would be exercisable for shares at a price of $2.12 per share for two years following closing.

The transactions will be subject to approval by the Ontario court under a plan of arrangement commenced under the Canada Business Corporations Act and will also be subject to approval by the required majority of holders of the senior notes and the receipt of required approvals from applicable state cannabis regulators.

Ayr is a cannabis company based in Miami.

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