Cannasouth (CBD) has entered a trading halt at its own request after a dispute emerged that could undermine a critical capital raise the company is working to complete.
New Zealand's listed market regulator NZ RegCo confirmed that CBD requested the halt due to a disagreement with certain secured convertible note holders, a situation that "has the potential to prejudice an urgent additional capital raise [it] is seeking to finalise and announce to market."
"CBD has an urgent need to secure funding to remain solvent," the regulator added.
The pause on trading is intended to allow CBD, its secured convertible note holders, and select shareholders time to work through the dispute and achieve a clear path to funding.
"CBD cannot be sure that all investors and the market will have equal information while it completes discussion prior to making a market announcement about a capital raise, and is concerned that there could be a disorderly market for its ordinary shares," the regulator said.
The trading halt was set to remain in effect until either an announcement from CBD regarding the discussions and capital raise, or the market opening on Thursday (March 28), whichever came first.
UPDATE (March 28, 2024): CBD has applied for a further trading halt extension as talks with representatives of its secured convertible note holders continue.
NZ RegCo said CBD is also in discussions with outside parties about possible short-term financing and is considering restructuring options.
The trading halt has now been extended until the earlier of an announcement from CBD concerning the discussions and capital raising, or the market opening on April 2.