After landing a $15 million leaseback agreement for US facilities, Ecofibre relieves the strain on its debt.

Following the acquisition of a US$9.7 million ($15.3 million) leaseback agreement for three production facilities in the US, the medicinal cannabis business Ecofibre (ASX: EOF) has essentially settled a persistent debt owed to lender Nubridge. The sale is a component of the company's deliberate attempt to cut expenses in the wake of a $40 million net loss in FY24 and a precipitous decline in revenue in the first quarter.Ecofibre has sold a third production facility for Ananda Health in Georgetown, Kentucky, as well as two locations in Greensboro, North Carolina, that were utilized for Ecofibre Advanced Technologies' manufacturing operations.

Ecofibre will pay US$1.2 million ($1.9 million) in rent per year for the properties under the leaseback arrangements, with yearly rate increases of 3% fixed for the first three years.Ecofibre will immediately pay down US$9 million of the US$10 million it owes secured lender Nubridge Commercial Lending LLC with the proceeds of the sale. At an interest rate of 12 percent annually, the remaining $1 million will be transformed into an unsecured debt that must be repaid by December 2027.Ecofibre's October announcement that it would get a new financing facility through a group of lenders to pay back the US$10 million due to Nubridge and a $1 million debt owed to the James & Cordelia Thiele Trust Fund has been nullified by the sale of the properties.