RICHMOND, Va.–(BUSINESS WIRE)– Altria Group, Inc (NYSE:MO) today announced that its wholly owned subsidiary, Altria Summit LLC, has notified Cronos Group Inc. (Cronos) of its irrevocable abandonment of (i) its warrant to purchase additional common shares of Cronos (the Warrant) and (ii) all rights that it may have held in the Warrant or any common shares underlying the Warrant for no consideration.
In March 2019, Altria acquired, through its subsidiaries, a 45% ownership interest in Cronos and the Warrant. The Warrant was exercisable until March 8, 2023 at an exercise price of CAD$19.00 per common share. Prior to abandonment of the Warrant, Altria, through its subsidiaries, owned 156,573,537 common shares of Cronos (representing approximately 41% of the Cronos common shares issued and outstanding) and, by fully exercising the Warrant, could increase its ownership by 84,243,223 Cronos common shares to 240,816,760 Cronos common shares (representing approximately 52% of the Cronos common shares that would be issued and outstanding following full exercise of the Warrant).
The closing share price of Cronos common shares on December 15, 2022 was CAD$3.81 and the Cronos common shares have not traded above CAD$6.00 over the past 12 months. Given the Cronos trading levels and the March 2023 expiry of the Warrant, Altria elected to abandon the Warrant on December 16, 2022. As a result of the Warrant abandonment, Altria expects to claim a capital loss of $483 million on its U.S federal consolidated income tax return for 2022. Altria continues to own 156,573,537 common shares of Cronos.
Altria, through its subsidiaries, holds the Cronos common shares for investment purposes. Altria will continue to evaluate Cronos’s business and prospects and all other factors it deems relevant in determining whether it or its affiliates will acquire additional common shares of Cronos or dispose of common shares of Cronos in the open market, in privately negotiated transactions (which may be with Cronos or with third parties) or otherwise.
https://investor.altria.com/press-releases/news-details/2022/Altria-Abandons-Expiring-Cronos-Warrant-Maintains-Initial-Investment/default.aspx
