Lion Electric’s warning about the “significant uncertainty” facing its future is scaring investors. The stock of the school bus and electric bus manufacturer tumbled on the stock market on Thursday, reaching a new low.
Posted at 9:39 a.m.
On the Bay Street floor, Thursday morning, the title of the Quebec company plunged 25%, or 20 cents, to trade at 59 cents.
Presenting its third quarter results on Wednesday, the Quebec manufacturer warned that its coffers could be dry within a year without a refinancing operation. There is no guarantee that the company based in Saint-Jérôme will achieve this.
“This warning is troubling,” commented analyst Benoit Poirier of Desjardins Securities in a note sent to his clients. We prefer to remain on the sidelines until financial results are less volatile and the financing outlook is clearer. »
Lion must also obtain leniency from its short-term lenders to survive.
A first major deadline is scheduled for November 15. This date marks the expiration of a period of relief from restrictive clauses – for example the level of liquidity to be maintained in the coffers – for a loan of US 117 million taken out with a banking syndicate.
In another file, a loan of US 22.6 million taken out from the Caisse de dépôt et placement du Québec (CDPQ) and the Quebec firm Finalta Capital matures on November 30.
As of September 30, which marked the end of the third quarter, Lion had access to approximately US$27 million in cash.
“With limited options and a cash consumption of more than 20 million UDS per quarter, Lion is in a delicate position,” estimates Rupert Merer, of National Bank Financial.
At CIBC World Markets, Kevin Chiang is not much more optimistic.
Despite the numerous measures deployed by the Quebec company to reduce its expenses, which have notably resulted in several waves of layoffs, the analyst believes that the continuation of Lion’s activities depends on many factors. The slope to go back up is steep.
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- 133 millions
- Market value of Lion Électrique, Thursday, at the opening of the Toronto Stock Exchange.
Toronto Stock Exchange