Shares of Aurora Cannabis Inc.
climbed 1.8% in premarket trading after the Canada-based cannabis company announced moves to bolster terms of its credit facility. The company said it reached agreement with its lenders to extend the maturity of its credit facility to Dec. 31, 2022, and transitioned the facility to a “minimum liquidity covenant” from a minimum Ebitda (earnings before interest, taxes, depreciation and amortization) covenant, which Aurora said provides it with “greater financial flexibility to execute the business transformation plan.” As part of that plan, Aurora said it has closed its Aurora Sun facility and cut production at its Aurora Sky facility by 75%. “These hard decisions are being taken to improve cashflow and provide agility to our business,” said Chief Executive Miguel Martin. The company also said it was shifting to a more variable cost structure, has expanded its network of external supply. The announcement comes as rivals Tilray Inc.
and Aphria Inc.
announced a merger to create the largest global cannabis company. Aurora’s stock has plunged 60.6% year to date through Tuesday, while the ETFMG Alternative Harvest ETF
has dropped 11.2% and the S&P 500
has gained 14.4%.