Canadian cannabis company Sundial Growers said it signed a deal to put in a stalking horse bid to buy the assets of distressed Hexo Corp. subsidiary Zenabis Global, which filed for creditor protection last week.
Calgary, Alberta-based Sundial did not disclose the value of the bid.
Sundial, which invested in Zenabis in December 2020 via a senior loan worth 58.9 million Canadian dollars ($45.6 million), said Monday that Zenabis still owed CA$51.9 million as of June 16.
Zenabis previously characterized Sundial’s actions related to that debt as “an attempt to coerce Zenabis into being acquired by Sundial” and subsequently agreed to be acquired by Hexo for CA$235 million.
According to a Monday news release, Sundial’s new bid for Zenabis’ assets covers:
- The company’s European Union Good Manufacturing Practice (GMP)-certified indoor cultivation facility in Atholville, New Brunswick.
- “A decommissioned 255,000-square-foot indoor facility in Stellarton, Nova Scotia, that was used as a packaging, processing, and value-added cannabis product manufacturing facility.”
Sundial said it estimates roughly CA$108 million has been invested in both facilities to date.
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“We are committed to creating continuity for the Zenabis Group’s operations and employees and assisting Zenabis in good faith with its restructuring,” Sundial CEO Zach George said in a statement.
“This process has just begun, and we will provide more information as it becomes available.”
Sundial’s bid is subject to the approval of the Quebec Superior Court.