- The new term loan will serve to reimburse $3.9 million of short-term liabilities and help fund growth initiatives such as the recently announced Dermolab Pharma acquisition and complete the purchase of a second manufacturing line for Steri-Med Pharma.
BOUCHERVILLE, QC, Dec. 23, 2024 /CNW/ - LSL PHARMA GROUP INC. (TSXV: LSL) (“LSL Pharma” or the “Corporation”), a Canadian integrated pharmaceutical company, today announced having secured a new $5 million long-term loan (the “New Loan”) from the Business Development Bank of Canada (“BDC”). The New Loan will serve to reimburse a series of debts and loans including $3.9 million of short-term liabilities, help reduce the Corporation’s annual debt servicing requirements and contribute to lower the overall interest costs for LSL Pharma.
The New Loan will be secured by the long-term assets of LSL Pharma’s subsidiary, Steri-Med Pharma, and bear interest at the BDC base rate plus 1.5% (the “Rate”). The Rate may be reduced by up to 2.5% should LSL Pharma meet certain financial criteria for each of the 2024 and 2025 fiscal years. The New Loan will be amortized over 25 years, will include a capital repayment moratorium for the first year and will be subject to nominal covenants such as a fixed charge coverage ratio.
“We are pleased to announce this New Loan which will serve to significantly strengthen our working capital by removing a total of $3.9 million of short-term liabilities”, said Luc Mainville, Executive Vice-President and Chief Financial Officer. “As we continue to implement organic and strategic growth initiatives, we will keep looking for opportunities to leverage our long-term assets and our improved financial performance to secure more affordable non-dilutive financing that can contribute to lower our cost of capital and debt servicing requirements” added Mr. Mainville
“By strengthening our working capital, we will be able to take full advantage of the recently announced Dermolab Pharma acquisition as well as complete the purchase of a second manufacturing line for Steri-Med Pharma. As mentioned in our November 6, 2024 press release, the second manufacturing line is a new fully automated sterile ointment production line to be delivered during the first quarter of 2025 and expected to be operational early 2026", said Francois Roberge, President and CEO of LSL Pharma. “This investment is expected to increase Steri-Med’s production capacity five-fold compared to its current 1.2-million-unit production capacity, as well as free-up capacity to support the development of Steri-Med’s first-to-market generic product pipeline”, added Mr. Roberge.
ABOUT LSL PHARMA GROUP INC.
LSL Pharma Group Inc. is a Canadian integrated pharmaceutical company specializing in the development, manufacturing and commercialization of high-quality sterile ophthalmic pharmaceutical products, as well as pharmaceutical, cosmetic and natural health products in solid, semi-solid and liquid dosage forms. Companies forming part of LSL Pharma Group include Steri-Med Pharma Inc., LSL Laboratory Inc., Virage Santé Inc. and Dermolab Pharma Ltd. For further information, please visit our website at www.groupelslpharma.com.
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SOURCE Groupe LSL PHARMA INC.
