CannTrust completes court-approved C$17 million financing, exits CCAA

By Sarah Lizee

Olympia, Wash., March 15 – CannTrust Holdings Inc. subsidiary CannTrust Equity Inc. closed C$17 million of financing that had been approved by the Ontario Superior Court on Feb. 25.

A group of investors led by Marshall Fields International BV, a subsidiary of Kenzoll BV, a Netherlands-based private equity investment company, has invested C$11.2 million to acquire a 90% equity interest in CannTrust Equity and provided a C$5.5 million secured credit facility to CannTrust Equity, which is subordinated to the existing $22.5 million credit facility arranged by Cortland Credit Lending Corp.

CannTrust Holdings retains the remaining 10% of the common shares of CannTrust Equity.

With the completion of the financing, the companies comprising the CannTrust Group have emerged from their court-supervised proceedings under the Companies Creditors Arrangement Act (CCAA), effective immediately.

As previously reported, the company’s fourth amended and restated plan of compromise, arrangement and reorganization dated July 7, 2021 was implemented in January.

The implementation of the CCAA plan followed approval by the Ontario Superior Court of Justice on July 16, 2021 and the approval of the U.S. class action settlement by the U.S. District Court for the Southern District of New York on Dec. 2.

Among other steps, the company contributed C$50 million to a trust established to facilitate the class action settlements in full satisfaction of the actions against it and C$2.7 million in trust for settlement of various claims under its CCAA proceedings.

CannTrust Holdings plans to convene a meeting of its shareholders within the next four months. In the meantime, it intends to explore alternatives for either applying to the Ontario Securities Commission for an order revoking the OSC's “failure-to-file” cease trade order dated April 13, 2020 or for taking steps to obtain a stock exchange listing for the common shares of CannTrust Equity.

CannTrust is a Vaughan, Ont.-based federally regulated licensed cannabis producer.

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