RIV Capital Inc. announced that PharmHouse Inc.’s asset purchase agreement to sell various operating assets, including its facility and certain equipment located at the facility, has been approved by the Ontario Superior Court of Justice pursuant to a Court Order granted in PharmHouse’s proceedings under the Companies’ Creditors Arrangement Act. The Agreement is subject to certain closing conditions, which the Company anticipates to be satisfied during the next fiscal quarter. The court-ordered stay of proceedings with respect to PharmHouse was also extended to June 30, 2021.
RIV Capital also announced that it will be making a voluntary payment of $25.0 million to the lenders of PharmHouse’s $90.0 million non-revolving syndicated credit facility relating to the Company’s estimated liability in respect of its guarantee of the PharmHouse Credit Facility. As noted in the Company’s press release announcing the Agreement which was entered into by PharmHouse on March 3, 2021, the Company does not anticipate any material changes to the PharmHouse Recoverability Assessment presented in its interim consolidated financial statements for the three and nine months ended December 31, 2020, available on the Company’s profile on SEDAR.
As a result of the Guarantee Payment, the Company’s estimated liability in respect of the PharmHouse Credit Facility will be reduced by $25.0 million. The Company is making the Guarantee Payment prior to March 31, 2021 in order to, among other things, reduce near-term debt servicing costs and for tax planning purposes in connection with the Company’s recent disposition of certain assets to Canopy Growth Corporation, which resulted in a significant capital gain for the Company.
RIV Capital is an investment and acquisition company specializing in cannabis with a portfolio of 13 companies across various segments of the cannabis value chain. We believe that bringing together people, capital, and ideas raises the potential of the entire cannabis industry. By leveraging our industry insights, in-house expertise, and thesis-driven approach to investing, we aim to provide shareholders with exposure to specialized and disruptive cannabis companies.