Key Takeaways
- Village Farms has amended its existing loan with Farm Credit Canada (FCC) to improve financial covenants.
- The changes provide the company with enhanced flexibility and remove the need for continued waivers.
- The FCC loan carries a variable interest rate below 8.0% and matures in May 2027.
- The amendment aligns with Village Farms’ increasing focus on its international cannabis operations.
- CEO Michael DeGiglio emphasizes the importance of the FCC relationship and the outlook for 2025 growth.
Village Farms International Amended Credit Agreement Offers Greater Flexibility
Loan Terms Reflect Business Evolution
Village Farms International, Inc. (NASDAQ: VFF) announced today a favorable amendment to its existing credit agreement with Farm Credit Canada (FCC), pertaining to the Company’s Fresh Produce loan. The amendment includes improved financial covenants, allowing Village Farms to operate without recurring waiver requirements.
This adjustment acknowledges the company’s strategic shift and operational growth since the original agreement was established in 2013. The revised loan agreement now better reflects Village Farms’ business model, which increasingly emphasizes its expanding international cannabis operations.
Details of the FCC Loan
No Change in Key Maturity and Interest Terms
Under the amended agreement, the FCC loan retains its original maturity date of May 3, 2027, and continues to carry a variable interest rate below 8.0%. Apart from the updated financial covenants, all other material terms of the loan remain unchanged.
The revised conditions aim to give Village Farms more operational room as it continues its strategic expansion in both the produce and cannabis segments.
Village Farms Leadership Commentary
CEO Highlights Growth Trajectory and Partnership with FCC
Michael DeGiglio, CEO of Village Farms, expressed confidence in the direction of the company and appreciation for its relationship with FCC.
“Today’s announcement reflects our long-standing, collaborative relationship with FCC and their continued support of our growth strategy,” said DeGiglio. “More favorable financial covenants on our FCC loan will enable us greater flexibility to make further growth investments in the future. We believe this amendment demonstrates strength in our business, which is positioned for a strong year of growth in 2025.”
Village Farms Strategic Focus on Cannabis Markets
International Expansion Drives Financial Adjustments
The loan amendment underscores Village Farms’ evolving focus, particularly on its international cannabis operations. The company has progressively expanded its footprint in the cannabis market, including operations in Canada and other jurisdictions, while continuing to operate in the produce sector.
This realignment of its financial terms appears to support further investment and strategic initiatives in the cannabis industry as the company positions itself for continued growth.
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