Investissement Québec behind the Saputo Foundation in the event of Lion Électrique’s failure

The Mach Group of Vincent Chiara and the Mirella and Lino Saputo Foundation obtained, last year, to take precedence over Investissement Québec (IQ) among the creditors of Lion Électrique in the event of financial collapse, according to information obtained by our Office investigation.

In 2023, when the Mach Group and the Foundation agreed to lend $90 million to Lion, IQ discreetly agreed to cede its rank of creditors for the benefit of these two investors.

This means that in the event that Lion places itself under the protection of the courts, they have a greater chance of seeing the color of their money than the financial arm of the Quebec government.

The information was confirmed to our Bureau of Investigation by the Ministry of the Economy, for which IQ is an agent.

“Investissement Québec is behind the Mach Group,” commented spokesperson Jean-Pierre d’Auteuil, adding that this information was public and could be found in the Register of Personal and Movable Real Rights (RDPRM).

The question of the ranking of creditors is highly topical, to the extent that Lion announced for the first time, at the beginning of December, the possibility of sheltering itself from its creditors under the Act respecting the arrangement with creditors. creditors of companies (LACC). The Quebec flagship, short of money and which obtained a reprieve from its lenders at the last minute, has until December 16 to obtain new financing.

“It’s progressing,” Vincent Chiara said only about the current negotiations on financing, when contacted by our Bureau of Investigation.

Well protected

In an interview, the executive vice-president of the Saputo Foundation, Francesco Miele, indicated that it had agreed last year to lend to Lion at an interest rate lower than IQ to be able to benefit from more guarantees if things were going wrong. The Saint-Jérôme de Lion factory was notably mortgaged in July 2023 for the benefit of Mach and the Foundation.

“I made sure that the Foundation was protected in every way,” commented Mr. Miele, rejecting criticism that the Foundation loan was too risky.

Quebec lends at 12% to Lion, while the Foundation does so at 11%, he argued. “There was openness on the part of Investissement Québec [à céder son rang de créanciers] because there was a difference in yield,” he explained.

Mr. Miele also indicated that at present the Foundation does not plan to reinvest in Lion Électrique. “It’s more the representatives of the Saputo family who are in these talks,” he said.

VINCENT CHIARA TAKES ON BRIGITTE ALEPIN

Real estate mogul Vincent Chiara, whose group has millions at stake in Lion, attacked tax specialist Brigitte Alepin this weekend on LinkedIn for her comments on the merits of the Saputo Foundation’s investment in the company.

In an article published last week in The Journalthe tax expert, who graduated from Harvard and whose work is covered in prestigious media like Bloomberg, had asked the question whether it was really the role of a foundation benefiting from generous tax credits to finance a company in trouble like Leo.

She had argued that the Foundation would be better off focusing on its official purpose of “distributing donations to various medical research foundations and other charitable organizations.”

“More nonsense! […] Please stop discouraging our Quebec philanthropists from investing in us [sic] society,” exclaimed Vincent Chiara. The businessman added that the Foundation’s investment was “a gesture to help a Quebec flagship and an industry that will have positive impacts for Quebec society.”

Fundamental problem

To which Brigitte Alepin replied that, according to her calculations, “taxpayers are losing more than 200 million dollars, by subsidizing, through tax gifts, the establishment and operation of the Saputo Foundation” .

“The fundamental problem is the tax system [des fondations]“, she insisted.

On the phone on Tuesday, Vincent Chiara indicated that his comment had been made in the heat of the moment, even if he still endorsed its content. “The goal is for the foundations to have longevity,” he said.

Reacting to the controversy, Francesco Miele indicated for his part that it was not up to the Saputo Foundation to dictate the rules for foundations in Canada. He argued that the amounts that foundations must pay each year have been increased significantly over the past two years, going from 3.5% of their assets to 5%.