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Tilray Looking To Close Hexo Deal Next Month

June 21, 2022

Tilray amended the terms of its deal with Hexo that could ultimately give it a sizable stake in its competitor. The deal involves Tilray essentially bailing out Hexo by taking on the remaining C$185 million ($143m) of outstanding balance Hexo owes to HTI Investments and its related funds in exchange for giving Tilray the right to exercise an ownership claim on Hexo.

Under the initial terms this stake would have amounted to approximately 37% of the company but under the amended terms, due to a revision to lower the conversion price on the notes by approximately half, Tilray’s potential stake in Hexo is now approximately 50%. Hexo will not receive any proceeds from this deal, as Tilray’s payments on Hexo’s debt will go to HTI Investments.

The deal is now expected to close on July 15 of this year, at which time Tilray will nominate two directors to Hexo’s board. Hexo recently reported earnings for the quarter ended April 30, in which revenue fell 14% to C$45.6 million ($35m).—Danny Sullivan

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