AYR Wellness Secures Funding to Drive Restructuring Efforts

Ayr Wellness Secures Senior Secured Bridge Credit Agreement

AYR Wellness Inc. (CSE: AYR), a prominent multi-state cannabis operator in the U.S., has made significant strides in its commitment to enhancing operational stability. The company recently executed a senior secured bridge credit agreement, which will provide them with essential funding of up to $50 million. This capital will not only support ongoing operations but also facilitate a seamless transition for its core business, in line with a broader restructuring initiative.

About the Bridge Credit Agreement

The bridge credit agreement represents a concerted effort by AYR and its affiliates to secure necessary financing during a pivotal transitional phase. The agreement involves various stakeholders, including CSAC Holdings Inc. as the borrower and Acquiom Agency Services LLC serving as the administrative and collateral agent. This collaboration highlights the company's strategic approach to solidifying its financial footing.

CEO's Statement on the Agreement

Scott Davido, the Interim Chief Executive Officer of AYR, stated, "Execution of the Bridge Credit Agreement is a significant milestone in our restructuring efforts. It is a crucial step towards securing the funding we need to bolster our operations, and it aids in maintaining the value of our core assets for our stakeholders' benefit." This sentiment underscores the company's focus on transparency and stakeholder engagement during times of change.

Utilization of Funds

The financial provisions from the bridge credit agreement are structured to address a variety of corporate needs. Funds from Tranche A will be allocated towards working capital and general corporate purposes, as determined by a 13-week cash flow budget that must be approved by the lenders. Furthermore, some resources will facilitate expenses associated with a sale transaction connected to the comprehensive restructuring plan.

Structure of the Bridge Facility

The bridge facility's structure is comprehensive, consisting of initial term loans (Tranche A and B) alongside delayed draw term loans. The facility is guaranteed by AYR Wellness Holdings LLC and its subsidiaries, ensuring that lenders have a secured position in the financial arrangement. This security is backed by the assets of the borrower and guarantees, ranked equally with AYR's existing secured notes.

Interest Rates and Maturity Terms

The interest rates associated with the bridge facility are established at 14% per annum, with the expectation that interest will be capitalized monthly. The maturity of Tranche A loans is set for a maximum of 60 days post-closing or up to November 16, 2025, marking a critical period for AYR as it undergoes this transition. Meanwhile, Tranche B has a longer maturity schedule, reflecting the complexities involved in winding down certain non-core operations.

Compliance and Obligations

It is essential for AYR to adhere to a set of commitments outlined in the bridge credit agreement, including the maintenance of mandatory cannabis licenses and compliance with established financial covenants. Additionally, concerns regarding liquidity have been defined, necessitating a minimum liquidity status of $17.5 million, ensuring the company maintains financial health during restructuring.

Anticipated Outcomes of the Agreement

As AYR Wellness navigates through its restructuring strategies, the company anticipates that the bridge credit's structured framework will assist in upholding operational continuity and advancing their strategic objectives strategically. As the deal unfolds, the successful execution of the bridge facility could pave the way for enhanced financial prospects.

About AYR Wellness Inc.

Headquartered in the U.S., AYR Wellness Inc. operates a substantial number of licensed retail locations across several key states. They are committed to offering high-quality cannabis products, catering to both medical and adult-use consumers. The organization prides itself on innovation, offering a portfolio of consumer packaged goods brands that resonate across diverse market segments.

Frequently Asked Questions

What is the purpose of the Bridge Credit Agreement?

The Bridge Credit Agreement aims to provide AYR Wellness with $50 million to support its operations and facilitate a restructuring process.

Who are the main parties involved in this agreement?

Main participants include AYR Wellness, CSAC Holdings Inc., Acquiom Agency Services LLC, and several AYR subsidiaries as guarantors.

What financial terms are included in the agreement?

The loans under the bridge facility have an interest rate of 14% per annum, and the structure allows for multiple draws based on corporate needs.

How does this agreement impact AYR's business strategy?

This agreement is integral to AYR's restructuring strategy, providing necessary funds to stabilize operations and maintain asset value.

What sectors does AYR Wellness operate in?

AYR Wellness operates in the cannabis sector, focusing on cultivation, manufacturing, and retail of cannabis products across various states in the U.S.

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