TORONTO — Shares of Organigram Holdings Inc. rose almost 19 per cent after it says BAT signed a deal to increase its stake in the cannabis company by investing $124.6 million.
The company says it plans to use $83.1 million of to create a strategic investment pool to help grow its geographic footprint and invest in emerging growth opportunities. The rest of the money will be will be used for general corporate purposes.
Organigram says the investment will help it extend its footprint beyond Canada and strengthen its financial position for long-term, sustainable growth.
Under the proposal, which is subject to regulatory and Organigram shareholder approvals and other conditions, BAT has agreed to buy 38,679,525 common shares and non-voting class-A convertible preferred shares over three tranches. The first tranche is expected to close on or around Jan. 16, 2024, followed by two more on or around Aug. 30, 2024 and Feb. 28, 2025.
BAT already holds an 18.8 per cent stake in Organigram. Organigram says the deal will see BAT increase its voting common share ownership stake to 30 per cent and overall equity interest to 45 per cent, including the non-voting class-A preferred shares.
Organigram shares closed up 30 cents at $1.89 on Monday on the Toronto Stock Exchange.
This report by The Canadian Press was first published Nov. 6, 2023.
Companies in this story: (TSX:OGI)
The Canadian Press