Village Farms has opted to receive a $5.94 million cash refund from Pure Sunfarms, relating to an additional equity contribution that Village Farms made to Pure Sunfarms on Nov. 19, 2019. "Village Farms has rescinded the attempt and has requested and received a refund of the $5.94 million it advanced to PSF in November 2019," the team with Emerald Health explains.
"As previously disclosed by Emerald Health Therapeutics, Inc., it has been disputing Village Farms' ability to make the VF Additional Equity Contribution of $5.94 million, as well as the cancellation of 5,940,000 common shares of Pure Sunfarms placed in escrow pending payment by Emerald of its related $5.94 million equity contribution, following its failure to make its required equity contribution to Pure Sunfarms on Nov. 1, 2019. In an effort to narrow the issues in dispute and accelerate the resolution of this shareholder dispute, Village Farms decided to unwind the VF Additional Equity Contribution, which has now been completed, with Pure Sunfarms providing Village Farms with the $5.94 million cash refund," the team with Village Farms explains. "The $5.94 million cash refund to Village Farms also eliminates the costs and delays involved in obtaining an independent appraisal of Pure Sunfarms that resulted from the VF Additional Equity Contribution."
The previously announced arbitration proceedings between the parties remain in process with respect to Emerald’s right to set-off a $5.94 million payment owed by Emerald to PSF against a portion of the more than $13 million currently owed by PSF to Emerald under its shareholder loan. A final decision on the arbitration is expected in summer 2020. Emerald continues to own 50% of the outstanding shares of PSF.
"Due to the arbitration process related to the Emerald Share Cancellation taking significantly longer than originally anticipated, and with the resulting number of incremental shares for our $5.94 million equity contribution unknown, we decided to reduce the number of items in dispute in an effort to bring the matter to resolution sooner for Village Farms and its shareholders," said Michael DeGiglio, CEO of Village Farms. "In addition, as a result of the $5.94 million cash refund to Village Farms, we anticipate that Pure Sunfarms may call for additional equity contributions by each of Village Farms and Emerald."
“We are pleased that this issue has been resolved in Emerald’s favour and we will rely on the ongoing arbitration process to resolve the remaining issues,’’ said Riaz Bandali, President and CEO of Emerald.
If Village Farms is successful in the arbitration and Emerald's escrowed shares are cancelled, Village Farms would own 53.5% of Pure Sunfarms and Emerald would own 46.5% effective as of Nov. 19, 2019. Village Farms expects a decision from the arbitration panel during the second half of 2020.
For more information:
Emerald Health Therapeutics