Cann Group (ASX:CAN) has unveiled a major financial reset, announcing an 81 per cent reduction in debt and a $9 million capital raising, providing what CEO Jenni Pilcher describes as “a clean foundation” for the company’s next phase of growth.
Under a deed with its major financier, National Australia Bank, Cann will settle approximately $69.96 million in outstanding loan balances for $15.3 million. As part of the agreement, NAB will release all security, discharge mortgages, and close all loan facilities.
The company has also secured an additional $9 million loan from its subordinated lender, an Australian private credit fund, bringing the total to $14.5 million with a two-year maturity. The loan carries 9.5 per cent per annum cash interest, 3 per cent per annum capitalised interest, and a 2 per cent facility fee. The lender will also receive 63,439,600 options exercisable at 1.46 cents per option, expiring at maturity.
Cann said it has received firm commitments for a $6.5 million institutional placement and will launch a $2.5 million Share Purchase Plan (SPP) for eligible shareholders in Australia and New Zealand, bringing the total capital raise to $9.0 million (before costs.
Cann is forecasting financial year (FY) revenue of approximately $17 million, representing 50 per cent growth on FY25, and earnings of $0.3 million to $0.7 million, compared to a loss of $5 million in FY25.
“We are very pleased to have reached this landmark agreement, which represents a major step forward in strengthening our balance sheet and positioning Cann for sustainable growth,” said CEO and Managing Director Jenni Pilcher. “The settlement with our major financier eliminates approximately $70 million of their debt for a payment of $15.3 million, providing a clean foundation for the company’s next growth phase. We are equally encouraged by the continued support from our subordinated lender and the additional $9 million capital raising, which together provide the flexibility required to execute on our growth strategy.
“With a clear path to positive EBITDA and forecast FY26 revenue of $17 million, Cann is now well placed to capitalise on the strong demand for our bulk flower and Botanitech™ products.”
As part of the refinancing and capital strategy, Mike Ryan will join the Cann board as Chair following completion of the transaction. Ryan has more than 40 years of experience in financial services, including senior roles at Goldman Sachs, Morgan Stanley, and Shaw and Partners. He currently chairs Sequoia Financial Group.
Interim Chair Doug Rathbone said, “This agreement is the result of an incredible and committed effort by our CEO and Managing Director, Jenni Pilcher. Jenni was well supported by Mike Ryan who will now join the board as Chairman, bringing with him a wealth of experience, strong governance capability, and a clear vision for the future direction of the company.”