Aleafia sets out to explore strategic alternatives while debt default looms
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- Aleafia Health (OTCQB:ALEAF) said it amended a credit facility and has started a strategic review to explore alternatives, which may include a sale of assets and shares of the company.
- Under the amended loan agreement with NE SPC II, the firm agreed to forbear on enforcing the contract the earlier of an event of default or May 31, among other things.
- The Canadian company noted that it is currently in breach of certain financial covenants under the loan agreement.
- Aleafia said that in connection with the amendment and in anticipation of the May 31 deadline, disinterested board members have started a strategic review to explore and evaluate potential strategic alternatives.
- These may include refinancing the debt under the loan agreement, a sale of all or a portion of the assets, common shares of the company, a business combination, new debt or equity financings or re-financings, a strategic investment in the company or other transactions.
- The company noted that there are no assurances that any potential transaction will come out from the review by May 31 or at all.