Failing to find money at the end of the emergency loan relaxation period, Quebec electric vehicle manufacturer Lion Électrique will shelter itself from its creditors, the company announced Tuesday morning. More than $200 million in public aid of all kinds is at risk.
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The Quebec manufacturer of zero-emission vehicles from Saint-Jérôme had extended the maturity date of several of its loans to December 16, but was not able to find an alternative solution in the meantime.
The company indicates in a press release that it “plans to file a request for protection against its creditors under the Companies’ Creditors Arrangement Act to restructure its activities and financial affairs and to conduct a formal process of sale and solicitation of investments in the activities or assets.
Lion tried unsuccessfully to repay $30M to the Caisse de dépôt et placement du Québec (CDPQ) and Finalta, in addition to a $167M loan to other lenders.
Press conference regarding the announcement of a battery pack assembly plant for Compagnie Électrique Lion in Saint-Jérôme, in Montreal, on Monday, March 15, 2021. In this photo: François Legault (Prime Minister of Quebec) and Justin Trudeau (Prime Minister of Canada) JOEL LEMAY/AGENCE QMI
Photo Agence QMI, JOËL LEMAY
“The Company is currently in discussions with its senior lenders to obtain additional funds under a new debtor-in-possession credit facility and plans to file for protection from its creditors under the Companies’ Creditors Arrangement Act in order to restructure its activities and financial affairs and to conduct a formal process of sale and solicitation of investments targeting the activities or assets,” underlines Lion.
“Trading in the common shares and other listed securities of the Company on the Toronto Stock Exchange (the “TSX”) and the New York Stock Exchange (the “NYSE”) has been suspended and it is expected that the interruption remains in effect until the completion by the TSX and the NYSE of a review concerning the eligibility of the Company for the purposes of listing on their stock exchange,” we note.
At the beginning of December, Lion announced the sale of its innovation center for $50 million to Aéroports de Montréal (ADM), a year and a half after inaugurating with great fanfare its adjacent Mirabel lithium-ion battery plant.
Liquidity crisis
This liquidity was not enough to replenish the manufacturer’s coffers.
Until November, The Journal had lifted the veil on Lion Électrique, this pillar of the battery sector which received more than $200 million in public aid and on which several small shareholders were betting heavily. Sources had pointed to haphazard vehicle development, insufficient road testing and massive cost overruns.
Photo Martin Alarie
“Lion has conducted, in collaboration with third-party testing partners, rigorous testing to meet the certification requirements,” assured a Lion spokesperson, Patrick Gervais. Lion only sells its customers vehicles with all the required certifications.”
The Journal also highlighted the historic order for 50 Lion trucks from Canadian National (CN), which had none in its fleet four years later.
Public aid to Lion Électrique
WE
• March 2020: $5 million (debenture)
• July 2021: $50 million (loan)
• July 2023: $46.3 million (debenture)
Innovation Canada
• July 2021: $50 million (loan)
FTQ Solidarity Fund
• July 2023: $25 million (loan)
Investment Quebec
• 2021-2021: 18,9 M$ (actions)
Caisse de dépôt et placement du Québec
• November 2022: $15 million (credit facility)
Fondaction
• July 2023: $7.5M (loan)
Electric Lion in eight dates
July 2008
- Two former managers of the bus manufacturer Michel Corbeil, Marc Bédard and Camille Chartrand, founded Autobus Lion.
November 2017
- Power Corporation is making a “significant investment” in Lion that gives it a 43.8% stake in the company.
May 2021
- Lion Électrique raises US$200 million by listing on the New York Stock Exchange and the Toronto Stock Exchange.
November 2021
- Mr. Bédard sells $16.5 million worth of Lion shares at an average unit price of $14.85.
December 2022
- Lion delivers a first bus assembled in its Illinois factory, which remains largely unused due to lack of demand.
Avril 2023
- Lion opens its battery factory in Mirabel, which currently has excess capacity.
July 2023
- Lion raises the sum of US$142 million, more than half of which comes from Quebec, the Fonds FTQ and Fondaction.
July 2024
- Lion announces the layoff of 300 workers. These job cuts are in addition to the 370 announced in previous months.
