Greenbrook TMS Raises $4,015,548.22 In Debt Financing
Portfolio Pulse from Benzinga Newsdesk
Greenbrook TMS Inc. has amended its credit facility with Madryn Asset Management, securing an additional $4,015,548.22 in debt financing. The total outstanding under the credit facility is now approximately $76 million. The new funds will be used for debt service obligations and general corporate purposes. Madryn has the option to convert up to $365,050 of the new loan into common shares at $1.90 per share. The liquidity covenant has been extended to January 15, 2024. The transactions are classified as 'related party transactions' and the company is using the 'financial hardship' exemption to bypass formal valuation and minority approval requirements.
December 15, 2023 | 9:34 pm
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Greenbrook TMS Inc. has increased its debt by over $4 million, which may address immediate liquidity needs but also increases financial obligations. The option for debt-to-equity conversion could lead to dilution of current shareholders.
The additional debt financing indicates that Greenbrook TMS is in need of immediate liquidity, which could be a sign of financial distress. The potential conversion of debt to equity at a fixed price may dilute the value of existing shares, which is typically viewed negatively by investors. The reliance on the 'financial hardship' exemption suggests serious financial difficulties, which could further erode investor confidence in the short term.
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