Listings: CSE Canada , Frankfurt and US OTC
Tickers: ERTH / VVIVF / WIMN
Market cap at time of publication: $20,6 MCAD
Stock price at time of publication: $0.25 CAD
Business: Regenerative agriculture
- Replenish Nutrients Ltd. (wholly owned subsidiary of Earthrenew) secures new debt facilities totalling $3.2 million to support planned expansion efforts.
Earthrenew a Canadian company focused on regenerative agriculture solutions, today announced that, effective July 21st, 2021, its wholly owned subsidiary Replenish secured new senior secured asset-based credit facilities totalling $3.2 million from Agriculture Financial Services Corporation . The ABL Facility will replace Replenish’s existing senior debt, and will be used to fund inventory growth and capital expenditures related to Replenish’s current production facilities.
“We are very pleased to have Replenish enter into this strategic relationship with AFSC, one of Alberta’s leading agricultural lenders,” said Keith Driver, EarthRenew’s Chief Executive Officer. “The facility is flexible, allowing it to fit our dynamic business needs. The customized financing provided by AFSC demonstrates the strong support for agribusinesses and will provide us with significant financial flexibility to continue to execute our growth plans.”
The ABL Facility contemplates a five-year term, including interest-only payments until January 1st, 2022. Amounts drawn on the main facility bear interest at a rate of 3.52% per annum, while the inventory loan rate is 2.875% per annum. On closing, an aggregate of $2,558,968 was drawn on the ABL Facility, with $1,592,291 used to repay existing senior debt. The ABL Facility is subject to compliance with financial covenants starting in 2022. EarthRenew has provided an unlimited guarantee as security for the ABL Facility.
We are very impressed that Earthrenew has secured very attractive non dilutive financing at such a low interest rate which really highlights that their business model is far more derisked than what the market is pricing the company at currently. To clarify for new readers not familiar with Earthrenew , Replenish is a wholly owned subsidiary of Earthrenew which was effectively purchased by may 1st 2021 . Earthrenew has had many great news in the past month which as of yet has not reflected in the share price including off take and distributions agreements with big stakeholders. We believe it’s only a matter of time before the market realizes what an undervalued gem Earthrenew is. The acquisition of Replenish is expected to add annual sales of 9-12 million CAD initially with big growth expected ahead, Replenish has a very good sales distribution network in the United States where Earthrenew is aiming to expand.
Earthrenew is a very exciting addition to the ESGFIRE portfolio on which we will be doing an extensive analysis on in the coming months. Earthrenews patented thermal processing technology transforms livestock manure into a powerful, all-natural organic fertilizer that promotes plant growth and restores soil health.This means, in simple terms, that farmers which use Earthrenew products not only get higher yields by 20-40 % on their crops but it also enables for the soil to sequester(store) more carbon. Studies have also shown that farmers who use this fertilizer on average saves the climate for aproximately 1 tonne of carbondioxiode for each tonne used compared to chemial fertilizer. The best part of the equation is the product is priced at the same level as chemical fertilizer and with possible carbon credits the products is actually cheaper. No wonder the company is sold out completely for 2021! The company’s plan is to increase their output to 400 000 tonnes by 2024-25 equalling revenues of about 140 million CAD.
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