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Aphria lines up $100-million investment

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Aphria Inc. announced Friday it has lined up a $100-million investment from an unidentified institutional investor, representing a fresh capital injection which the Canadian cannabis producer has earmarked for “opportunistic” international expansion efforts.

Aphria Chief Executive Officer Irwin Simon told BNN Bloomberg in a phone interview that the investment demonstrates confidence in Aphria as well as the company’s management and strategy.

“It shows [the investor] is a believer in the [cannabis] category where a lot of licensed producers have had trouble finding any type of financing,” Simon said.

“We didn’t have to do this. We have close to $600 million on our balance sheet. It just gives us a much stronger balance sheet to continue doing what we’re doing.”

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Cannabis companies have faced a capital crunch in the past several months following a broad sell-off in the legal marijuana space and weaker-than-expected quarterly revenue figures. However, Aphria has emerged as one of the few Canadian cannabis producers to report positive adjusted earnings before interest, tax, depreciation and amortization, a key metric that other major companies have yet to achieve.

The yet-to-be-named investor will acquire about 14 million units at $7.12 apiece. Each unit includes one common share in Aphria as well as one-half of a common share purchase warrant priced at $9.26. The warrants are set to expire two years after the deal closes, Aphria said in a statement.

If the investor exercises all warrants, they will acquire about 21 million shares in the company, making it Aphria’s leading shareholder, according to Bloomberg data. John Cervini, an Aphria co-founder, is currently the company’s leading shareholder with about 9.8 million shares, or about 3.9 per cent of the company, according to Bloomberg data.

Simon declined to specify who the institutional investor is, citing a confidentiality agreement, but noted it would assume less than 10 per cent ownership of the company if the warrants are exercised in full.

“When someone writes a $100-million cheque, that’s going to be a sophisticated investor who knows Aphria and believes in Aphria,” he said. “It’s one investor with one cheque. With the warrants, it’s an opportunity to have an additional $64 million available to us.”

He also said Aphria is eyeing “opportunistic acquisitions” globally as well as within Canada to deploy its new capital, but declined to specify any areas where he is particularly interested in investing.

“There’s going to be opportunistic assets and a lot of stuff to do,” he said. “Over the next six months, the industry will condense and consolidate and I’d like to be prepared and have the right balance sheet to do that.”

Raymond James cannabis analysts Rahul Sarugaser and Michael Freeman said the $100-million investment signals that there still remains positive sentiment around cannabis players with strong balance sheets.

“The market clearly expects [Aphria] to not only weather the present storm, but to then flourish when the market recovers, likely during the back half of 2020,” the analysts said in an email to BNN Bloomberg.

Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new — and controversial — Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day.

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Investment in Road Upgrades – Government of Nova Scotia

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The Province is investing an additional $4 million in the Rural Impact Mitigation program and equipment to improve roads in Nova Scotia.

The government had already increased its commitment to the program by $11 million, as well as investing $20 million more in the Gravel Road Capital program.

“Improving our provincial roads is important for the safety of Nova Scotians and an investment that makes sense to extend the lifespan of this vital infrastructure,” said Public Works Minister Kim Masland. “The sooner we make this investment, the sooner people are safer, and the longer our roads will last.”

Investments will be made by the end of the fiscal year and will include rebuilding gravel roads, brush cutting, pavement patching, ditching, shoulder gravelling, guardrail repairs, shoreline protection and equipment purchases.

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The government had already budgeted more than $62 million for these two programs, bringing the total investment this year to more than $66 million.

Quotes:

This additional support for the Rural Impact Mitigation program is greatly appreciated. There is no shortage of projects that need to be completed. This program is particularly beneficial for some of the smaller contractors within road building. These smaller contractors are very important to the overall Industry health.
Grant Feltmate, Executive Director, Nova Scotia Road Builders Association

Quick Facts:

  • the Rural Impact Mitigation program annual budget has grown from $11 million in 2021-22 to $26 million this year
  • the Gravel Road Capital program budget has increased from $20 million in 2021-22 to $40 million this year
  • Department staff evaluate and prioritize the roadwork that needs the most attention, taking into consideration factors such as road condition and traffic volumes


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Shenzhen Holds 2022 Global Investment Promotion Conference to Build a Magnet for International Investors

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SHENZHEN, China, Dec. 8, 2022 /PRNewswire/ — Shenzhen welcomes outstanding investors from all over the world. The 2022 Shenzhen Global Investment Promotion Conference will be held in Shenzhen, China on December 9. A number of major projects in the fields of information technology, artificial intelligence, biotechnology, new energy, new materials, high-end equipment, and environment protection will be signed to contracts.

With the theme ‘Spur Opening Vitality, Gather Innovation Momentum — Invest in Shenzhen, Build a Winning Future’, the conference will award certificates to outstanding introduced businesses, multinational corporate headquarters, and investment consultants. The conference demonstrates Shenzhen’s determination to promote a high level of openness and present its top business environment, according to the Commerce Bureau of Shenzhen Municipality.

Shenzhen’s appeal to investors has not only been shown in China, but also worldwide. There have been 16 sessions of the 2022 Shenzhen Global Investment Promotion Conference held in 16 cities worldwide, including New York, Detroit, Paris, Dublin, Tokyo, Sydney, Brisbane, Johannesburg, Moscow, etc. Through online investment and online signing, Shenzhen has deeply connected with global investors, invited overseas businesses and talent to invest and set up companies in Shenzhen.

The session in Rio de Janeiro received nearly 100 attendees, including Tian Min, the Chinese Consul General to Rio de Janeiro, Eduardo Paes, the Mayor of Rio de Janeiro, Li Ke, the Executive Vice President of BYD, and representatives of well-known local trades, technology companies, and trade associations. Participants have expressed their hopes that Brazilian and Shenzhen businesses will conduct further exchanges and benefit from each other’s strengths, continue to explore new grounds for cooperation, and promote the in-depth development of ChinaBrazil economic and trade relations.

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The Shenzhen Global Investment Promotion Conference has been held for three years with more than 600 projects signed to contracts involving a total intended investment of over 2 trillion yuan. The conference has become a major representation of Shenzhen’s achievements of high-level opening up, high-quality economic and social development, and a world-class business environment. The conference is a major investment platform for gathering global investors and a major exchange platform for investment promotion.

An optimal business environment has made Shenzhen a popular destination for global investors. From January to October 2022, the actual use of FDI in Shenzhen was nearly 10 billion USD, and foreign investor confidence has been strengthened. Up until now, a total of over 170 countries and regions have invested in Shenzhen.

Mr. Siddharth Chatterjee, the UN Resident Coordinator in China, stated, “The experience of Shenzhen, as a hub for investment and being ranked as a top city of Chinese mainland for overall economic competitiveness by the Chinese Academy of Social Sciences, can serve as an example both for other cities within China that seek to attract more foreign investment, and for cities and countries around the world.”

View original content:https://www.prnewswire.com/news-releases/shenzhen-holds-2022-global-investment-promotion-conference-to-build-a-magnet-for-international-investors-301698943.html

SOURCE The Commerce Bureau of Shenzhen Municipality

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Canada proposes overhauling foreign investment rules to tackle security risks

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OTTAWA, Dec 7 (Reuters) – (This Dec. 7 story has been corrected to delete the phrase saying that only one deal had been previously blocked under the Investment Canada Act, in the ninth paragraph)

Canada on Wednesday proposed beefing up its foreign investment rules to give the government greater power to scrutinize and potentially block overseas deals that bring national security risks.

The proposed amendments would be the biggest overhaul to the Investment Canada Act (ICA) since 2009 and come at a time when the country’s rich deposits of critical minerals, which are crucial to the green transition, are in hot demand.

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“These proposed changes will ensure that foreign investments in Canada are not only to the net benefit of Canadians, but are not detrimental to our national security,” Industry Minister Francois-Philippe Champagne, said at a press conference announcing the proposal.

Champagne said the proposed changes are country-agnostic, though his ministry last month ordered three Chinese companies to divest their investments in Canadian critical minerals after a national security review.

The government also took aim at Beijing in its Indo-Pacific strategy launched last month and said it would tighten foreign investment rules to protect intellectual property and prevent Chinese state-owned enterprises from snapping up critical mineral supplies.

The proposed amendments to ICA include a requirement for foreign investors in some Canadian industries to notify the government before finalizing deals.

It would allow the government to impose interim conditions to prevent acquirers from accessing trade secrets, intellectual properties and sensitive personal information, and the authority to accept undertakings to mitigate national security risk.

It would also allow greater exchange of information with allies to better address common national security challenges.

The ICA became law in 1985 and has had several updates.

The sectors impacted by the early disclosure rule have not yet been determined, but Champagne said the targeted industries are going to be linked to sensitive technologies, critical minerals and those dealing with personal information.

Ottawa sees the critical minerals sectors as vital to Canada’s economic prosperity and outlined rules earlier this year to protect the country’s critical minerals resources from foreign state-owned companies.

Reporting by Ismail Shakil in Ottawa; Editing by Leslie Adler and David Gregorio

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