TORONTO (Reuters) - Aurora Cannabis said Chief Executive Terry Booth will retire and Executive Chairman Michael Singer become interim CEO as the beleaguered marijuana producer announced C$1 billion ($752.79 million) in impairment charges on Thursday.
The company also cut about 500 jobs, including about 25% of corporate positions.
Aurora’s U.S.-listed stock fell 13% in after-hours trading. The shares were halted earlier on Thursday.
Aurora expects impairment charges of as much as C$225 million on assets and as much as C$775 million on goodwill in the second quarter, it said. Net revenue will be between C$50 million and C$54 million, compared with C$54.2 million a year ago.
Aurora also said on Thursday it had made amendments to its secured credit facilities, including removal of some covenants, giving it options to refinance at maturity. Analysts have warned the company may not be able to meet the covenants of a C$360 million loan due in August 2021.
Aurora’s expenses in the most recent quarter were almost four times its sales, and it holds less than two quarters’ worth of cash and short-term investments.
Singer takes the helm as Aurora faces criticism for its aggressive global expansion amid uncertain demand. Aurora has stopped estimating when it will become profitable after missing its own guidance.
The executive change makes Aurora the latest in a string of Canadian cannabis companies, including Canopy Growth, Aphria, Supreme Cannabis and Sundial Growers to change leadership as soaring costs and disappointing sales prompt concern from investors sitting on billions of dollars in losses.
Singer has been on the board of the Alberta-based company since May 2016 and was named executive chairman nearly a year ago.
Booth, a co-founder of the company, will remain on Aurora’s board and will become a strategic adviser to the company, Aurora said, confirming an earlier Reuters story.
“I don’t think we’re going to see some sort of major strategic change, because Singer has been involved with the company and they’re keeping Booth on as an adviser,” said Andrew Kessner, an analyst at William O’Neill in New York. “This is to signal to the market that they are making changes.”
Aurora has begun a formal search for a permanent CEO, Booth said in the memo without providing a time frame, adding that details would be shared once the process is complete.
Booth’s departure follows the abrupt exit of Chief Commercial Officer Cam Battley in December.
Reporting By Nichola Saminather; Editing by Chris Reese, Tom Brown and Cynthia Osterman