Cannasouth rights offer

Cannasouth (NZX:CBD) has announced a 1-for-10 renounceable rights offer. Learn more about the offer and how to take part through Sharesies.

Offer summary

  • 1-for-10Get the right to buy 1 new CBD share at the offer price for every 10 you already own.

  • $0.30 NZDPer share offer price.

  • 18 August 2022Last day to have bought CBD shares to be eligible to receive rights.

Cannasouth is aiming to raise $4.1 million through the offer, and plans to use the money to help towards the costs of:

  • The delivery of flower sales to New Zealand and export markets.

  • Distribution of finished medicinal cannabis products in New Zealand.

  • Expanding plant genetics onboarding and tissue culture propagation capabilities.

  • Further developing CBD’s laboratory support function for in-house quality testing.

To learn more, check out:

A rights offer is one way that a company raises capital (cash). It gives existing shareholders the opportunity to buy more shares in the company—usually at a discounted price and in proportion to the amount of shares they already own.

To take up rights, they need to be ‘exercised’—in other words, just holding rights doesn’t mean they’ll convert automatically into shares.

When a rights offer is ‘renounceable’, it means that you can sell your rights to someone else who can use those rights to buy the shares you’re entitled to.

To learn more, read our article on rights offers.

If you held CBD shares at market close on Thursday 18 August 2022 through Sharesies, you’ll have received the right to buy 1 CBD share at a set price of $0.30 NZD per new share for every 10 CBD shares you held. Any CBD shares bought after this date through Sharesies are not eligible to receive rights. 

If you were allocated rights for CBD, they should’ve appeared in your Portfolio on Friday 19 August 2022 as ‘Cannasouth Rights’.

If you held a fractional amount of shares in CBD, you’ll have been allocated a proportional amount of rights.

How to take part

Whether or not you were eligible to receive rights, you may be able to take part in the offer. In either case, you’ll need to have a registered address in New Zealand or Australia.

Exercising rights

Each right gives you the option to buy 1 CBD share at a set price of $0.30 NZD per share. That means you’ll pay the set price for every right that you exercise.

To exercise some or all of your rights, go to ‘Cannasouth Rights’ in your Portfolio, and select Exercise, buy, or sell.

You’ll need to have enough money in your Wallet at the time that you exercise to pay the set price per share. If you need to convert currency to pay the exercise price, you’ll also need to pay a currency exchange fee

If you exercise your rights, Cannasouth is expected to allocate the shares you’re buying on Wednesday 14 September 2022.

If you don’t exercise your rights before 5 PM Wednesday 7 September 2022, your allocation of shares will become available for other investors to buy in the oversubscription bookbuild facility. 

If this happens:

  • you may or may not receive some value for them

  • your existing shareholding will be diluted. 

Note: The price you pay for new shares in the offer may be higher or lower than the price that shares are trading at on the NZX.

Exercise period on Sharesies

Friday 19 August 2022 to 5 PM Wednesday 7 September 2022

Fees

You won’t be charged the Sharesies transaction fee to exercise your rights, but you may be charged currency exchange fees if you need to convert between currencies to pay the exercise price.

The oversubscription bookbuild facility gives investors the opportunity to apply to buy additional Cannasouth shares. Sharesies investors who have a registered address in New Zealand or Australia are able to take part.

The offer price will be determined by a book building approach and will be equal to or above $0.30 NZD per CBD share—which may be higher or lower than the price the shares are trading at on the NZX.

How to apply

To apply, search for ‘Cannasouth’ in Sharesies, select ‘Buy’, then ‘Apply for oversubscription bookbuild facility’.

Your application will be for CBD shares in NZD. You’ll need to give the highest price you’re willing to pay per share, and choose the maximum amount of money to spend. You’ll need to have enough money in your Wallet at the time of your application.

Applications for the general shortfall offer close at 5 PM (NZST) on Wednesday 7 September 2022.

Scaling

If there’s more interest in the oversubscription bookbuild facility than there are shares available, it might be scaled. This means you may receive fewer or none of the shares that you apply for.

Offer period on Sharesies

Friday 19 August 2022 to 5 PM Wednesday 7 September 2022

Fees

You won’t be charged the Sharesies transaction fee to buy shares through the oversubscription bookbuild facility, but you may be charged currency exchange fees if you need to convert between currencies.

Key dates

Event

Date

Last day to buy CBD shares to be eligible to be allocated rights

Thursday 18 August 2022

Rights appear in Sharesies Portfolios

Friday 19 August 2022

Rights exercise period opens

Friday 19 August 2022

Rights trading is available through Sharesies

Friday 19 August 2022

Applications for oversubscription  bookbuild facility open through Sharesies

Friday 19 August 2022

Record date for the offer

5 PM Monday 22 August 2022

Rights trading ends

Thursday 1 September 2022

Applications for exercising rights closes through Sharesies

5 PM Wednesday 7 September 2022

Applications for oversubscription bookbuild facility close through Sharesies

5 PM Wednesday 7 September 2022

Cannasouth expected to allocate new shares

Wednesday 14 September 2022

New shares expected to start trading on the NZX

Wednesday 14 September 2022

Refunds and premiums paid from oversubscription bookbuild facility (if any)

By Wednesday 21 September 2022

Before taking part

All investing involves risk—you aren’t guaranteed to make money, and you might lose the money you start with.

We encourage you to do your due diligence, consider the risks involved, and speak to a licensed financial advice provider if you need help deciding whether to take part.

For some things to consider before taking part, check out the FMA’s guide to taking part in a rights issue.

And now for the legal bit

Sharesies is not responsible for the offer and Sharesies can’t offer any financial advice on whether or not you should take part in this offer.
When taking part through Sharesies, the Sharesies General Terms and Conditions apply (with necessary changes to accommodate this rights offer) and the definition of shares extends to rights. Fees may apply for use of the platform provided by Sharesies Limited. Sharesies will be paid a fee from Cannasouth for distributing this offer to Sharesies investors. 
The information provided is not financial advice and has been prepared without taking into account your objectives, financial situation, or needs. Speak to a licensed financial advice provider for advice specific to your circumstances.

Learn more about Cannasouth and rights offers