(Bloomberg) — Aurora Cannabis Inc., struggling with a cash crunch and a slumping stock price, announced the departure of its CEO, the termination of about 500 employees and a significant reduction in its credit facility.
Chief Executive Officer Terry Booth, who founded the Canadian pot company in 2013, will retire but will remain a director on the board, the company said Thursday in a statement. He’ll be replaced on an interim basis by Executive Chairman Michael Singer.
“I look forward to serving as interim CEO and executing on our short-term plans, which include a rationalization of our cost structure, reduced capital spending and a more conservative and targeted approach to capital deployment,” Singer said in the statement.
Shares plunged as much as 20.5% in post-market trading in New York, and are down 74% over the past 12 months through Thursday’s close.
Aurora cut nearly 500 staff across the company, including approximately 25% of corporate positions, it said. Its goal is to cut quarterly selling, general and administrative expenses to a range of C$40 million to C$45 million, a significant decrease from current levels.
Aurora also announced that its banking syndicate cut the company’s C$360 million credit facility by C$141.5 million and will require it to maintain at least C$35 million in liquidity, according to the statement. It removed an earnings ratio covenant that analysts warned it may breach, and requires Aurora to achieve certain levels of positive earnings beginning in the first quarter of fiscal 2021.
The company said it also expected to record a goodwill writedown of C$740 million to C$775 million, and impairment charges of C$190 million to C$225 million in its fiscal second-quarter results. The impaired assets are primarily in Denmark and South America, Chief Financial Officer Glen Ibbott said in the statement.
Aurora’s $345 million of convertible bonds due February 2024 are trading around 60 cents on the dollar, yielding nearly 20%, according to Bloomberg data. As of today, the company has remaining capacity under its current at-the-market equity program of approximately C$200 million. It had C$156 million in cash at Dec. 31.
The company also released preliminary results for the quarter ended Dec. 31. It expects to report cannabis revenue of C$50 million to C$54 million net of excise taxes and provisions for returns. Analysts were expecting revenue of C$79 million, according to data compiled by Bloomberg.
It will release its full results on Feb. 13.