Bevo Zenabis Global Inc. (TSX: ZENA) ("Zenabis" or the "Company") announced today that it has closed the previously announced sale of Bevo Farms Ltd. ("Bevo"), pursuant to the rental rebate, liability contribution and share purchase agreement (the "Agreement") dated December 31, 2020 between Zenabis and Langley Propagation and Floral Company Ltd. ("Langley").
As announced on December 31, 2020, the Agreement provided for the sale of all of the shares in Bevo to Langley, as well as the provision of funding for certain liabilities of Zenabis, the retention by Langley of certain existing debt of Bevo, the provision of a guarantee of the existing debt of Bevo by Langley, and reductions to certain rent amounts owed by Zenabis to Bevo. On December 31, 2020, Langley subscribed for shares in the capital of Bevo, resulting in Langley owning, as of and from December 31, 2020, approximately 99% of the issued and outstanding shares of Bevo. The closing today was the sale of the remaining approximately 1% of the issued and outstanding shares of Bevo owned by Zenabis. The cash closing proceeds received by Zenabis upon the closing today was approximately $8.79 million.
In addition, following the closing of the sale of Bevo to Langley, the Company's outstanding consolidated financial indebtedness has been significantly reduced since, concurrently with the closing of the sale of Bevo, Zenabis has been unconditionally released from its prior guarantee of Bevo's obligations to Bank of Montreal ("BMO") under the Bevo credit facility with BMO.