Melodiol Global Health Limited (ASX: $ME1) has signed a non-binding Letter of Intent (LOI) with Nacerna Life Sciences Inc. for the proposed sale of its Mernova production facility and land in Nova Scotia, Canada. The initial cash consideration for the sale is $12m (C$11m), with two earn-out provisions totaling $2.2m. This transaction is expected to strengthen the company's balance sheet by repaying all existing secured debt and allowing for working capital to be deployed to Health House and Creso Pharma Switzerland for future growth.
Chief Executive Officer Mr William Lay stated, 'The sale of the Mernova building, equipment, and land is expected to be a pivotal step in the Company's trajectory. We are pleased that the initial consideration is in line with the top end of the independent appraisals received for the Sale Assets, an outcome which highlights the quality of the assets the Company has built. Following the expected repayment of all secured debt, the Company will be in a stronger financial position, and able to focus all of its efforts on continued growth in the remaining business units, while aggressively pursuing its long-term strategic objective of group cash flow positive.'
Melodiol Global Health (ASX: $ME1) has proposed the sale of its Mernova production facility and land in Nova Scotia to Nacerna Life Sciences Inc. for an initial cash consideration of $12m, with additional earn-out provisions totaling $2.2m. The transaction proceeds are expected to strengthen the company's balance sheet by repaying all existing secured debt and allowing for working capital to be deployed to Health House and Creso Pharma Switzerland for future growth. The company aims to retain access to and generate revenue from the Ritual cannabis brand, even without access to the Sale Assets, and leverage its ability to purchase third-party produced flower to continue marketing its Ritual products in the Canadian marketplace. This strategic move aligns with the company's long-term objective of achieving group cash flow positivity and continued growth in its remaining business units.