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by Mike Caswell
Zenabis Global Inc. has filed a case in the Supreme Court of British Columbia over what it calls a coercive attempt by Sundial Growers Inc. to acquire the company through a debt transaction. It says that Sundial, which bought $57-million in Zenabis debentures just days before a large repayment came due, has been demanding more money than is owing. Zenabis is seeking a court order that would effectively fix the amount it would have to pay.
The allegations are contained in a petition that Zenabis filed at the Vancouver courthouse on Friday, Feb. 19. The case comes about 2-1/2 months after Zenabis found itself the target of what it describes as an underhanded effort by Sundial to acquire the company. In late December, 2020, Zenabis was facing a payment deadline on some of its debt. The company did not have sufficient money, but was engaged in what it says were productive talks with its lender.
The problems, as set out by Zenabis, came after Sundial unexpectedly acquired the lender, a numbered Ontario company, for $58.9-million. Zenabis learned about the acquisition just two days before a $7-million repayment was to become due. The reason for the acquisition, as set out in the petition, was to use the debt for leverage to acquire Zenabis.
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