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Labat Secures R300 m Lifeline from Californian Investors and Lists on Frankfurt Stock Exchange

Frankfurt Stock Exchange Listing gives Labat first-mover advantage as Germany heads towards legalization

Labat Africa has listed its shares on the Frankfurt Stock Exchage (FSE) as momentum gathers pace in Germany towards adult-use legalization. 

Labat Africa chief executive officer, Brian van Rooyen, said in a statement on 6 December 2021 that: “The FSE listing is an exciting move for the group. It comes off the back of Germany’s new coalition government planning to legalise cannabis for medicinal and recreational purposes.

“The FSE listing will allow us to accelerate our cannabis goals in the European market, particularly now with robust negotiations currently underway in the growing cannabis economy of the European economic powerhouse, Germany.”

Germany is set to legalise cannabis nationwide after major coalition parties reached an agreement after last month’s elections. 

“This reform has been a long time coming in Germany. The timing was strategic for us, we intend to capitalise on the proverbial first-mover advantage, while also taking advantage of the receptive and bullish European investor climate,” said van Rooyen.

 

California-based GRGV commits R300 m to Labat Africa over next 3 years

Labat is already listed on the Johannesburg Stock Exchange but has been struggling to make money since its strategic shift to become a fully integrated cannabis healthcare company in 2019.

The company said in a statement that it had secured funding from California-based GR Global Ventures (GRGV). GRGV has committed to invest an amount of up to R300 million over the next three years in cash for equity in exchange for new ordinary shares in Labat Africa.

“The capital commitment will be drawn down by Labat Africa by way of capital calls which the company has the right to exercise with the timing and pricing at Labat’s sole discretion, subject to trading volumes and pricing in accordance with the JSE listings requirements.

“As part of the Capital Commitment, GRGV is also entitled to receive warrants for up to 30 million new Labat Africa ordinary shares at an exercise price of ZAR0.50 per ordinary share representing more than a 100% premium on the current Labat Africa trading price.”

Labat Healthcare Group Executive, Herschel Maasdorp, said: “We expect that the funding will enable the business to successfully navigate tough South African trading conditions and secure a prime spot for the business in the growing cannabis sector”.

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