The company intends to divest cannabis subsidiaries in Canada.
US-based Pyxus International, Inc. (Pyxus) a global value-added agricultural company, announced recently, after a strategic review by the Boards of Directors of Pyxus and certain subsidiaries, that it intends to divest its cannabis business in order to focus on its more profitable tobacco and e-liquid businesses. In addition, the Company has taken action to restructure its industrial hemp and CBD operations to minimize financial investment in that business.
“Our strategic decision to exit cash flow negative cannabinoid operations will allow us to reduce corporate SG&A and sharpen our focus on growing our more profitable tobacco and e-liquid businesses such that these complementary businesses can fully leverage Pyxus’ 145-year heritage and existing relationships,” said Pieter Sikkel, President and CEO of Pyxus International.
In connection with the plan, the Company’s three Canadian cannabis subsidiaries, FIGR Brands, Inc., Canada’s Island Garden Inc. (FIGR East), and FIGR Norfolk, Inc. (FIGR) filed for and received protection from their creditors under the Companies’ Creditors Arrangement Act (CCAA). FTI Consulting Canada Inc. has been appointed as the Court-appointed monitor (FTI) of the Applicants.
As part of its filing under the CCAA, FIGR has obtained a Debtor in Possession (DIP) loan facility from another Pyxus subsidiary to support FIGR and fund its operations through the CCAA proceedings.
During the CCAA proceedings, it is expected that ordinary course obligations to employees and key suppliers of goods and services subsequent to the filing date will continue to be met. FIGR intends to seek approval of a sale process to be conducted by the Monitor in the near future.
