Entourage Health gets second extension on debt terms
The struggling Canadian operator gets another month of breathing room on debt terms from its union pension fund lender.
Entourage Health Corp. (TSXV: ENTG) has received its second debt forbearance extension in less than a month, buying more time to restructure its financial obligations amid mounting losses.
The Canadian cannabis producer said Friday it reached an agreement with LiUNA Pension Fund of Central and Eastern Canada to extend debt covenant waivers through Nov. 29. The extension follows an initial forbearance granted Oct. 8 that was set to expire Thursday.
Company officials said they are working “collaboratively” with LiUNA to modify the terms of both senior and subordinated credit agreements. The forbearance remains subject to certain undisclosed conditions.
The extensions come as Entourage deals with declining sales and widening losses. The company posted a net loss of C$10.3 million in the second quarter, up from C$9.5 million in the same period last year. Revenue fell to C$12.2 million from C$13.3 million, according to August financial results.
As of June 30, Entourage reported a working capital deficit of C$163.2 million and accumulated losses of C$382.2 million, prompting going concern warnings.
CEO George Scorsis pointed to some bright spots at the time, including expanded distribution of the company’s Dime Bag brand, which now reaches more than 90% of retail outlets in Ontario, Canada’s largest province.
Entourage operates a 26,000-square-foot processing facility in Aylmer, Ontario, and maintains an exclusive partnership with LiUNA, Canada’s largest construction union, through its Starseed Medicinal brand.
