One day after raising this ultimate possibility, Lion Électrique announced in a press release that it had requested an order from the Superior Court of Quebec to protect itself against its creditors under the Companies’ Creditors Arrangement Act.
• Also read: Lion Électrique has twice benefited from subsidies for defective trucks
• Also read: Lion Électrique will protect itself from its creditors: more than $200 million in public funds at risk
On Wednesday, the company announced that in the absence of being able to find the money at the end of the period of relaxation of urgent loans ($30 million to the Caisse de dépôt et placement du Québec (CDPQ) and Finalta , in addition to a loan of $167 million to other lenders), it was thinking of protecting itself from its creditors.
Lion was quick to announce that he had made this decision the next morning. Some $200 million in public aid of all kinds is at risk.
«In its Initial Order Request, the Company seeks approval of a formal sales and investment solicitation process (the “VSI Process”) to provide interested parties with the opportunity to submit proposals, with the aim of enable the Company and its senior lenders to determine what is the best transaction available for the Company and its stakeholders,” Lion said in a press release.
«This announcement follows the press release published by the Company on December 17, 2024 announcing the expiration of the period of relaxation of restrictive covenants under its senior revolving credit agreement and the maturity of its loan agreement with Finalta Capital and the Caisse de dépôt et placement du Québec»we add.
Lion carries debts totaling $700 million, including $335 million in long-term liabilities. As of September 30, the company had a little more than $35 million in cash, an amount that has declined since that date.
«Trading in the Company’s common shares and other listed securities on the Toronto Stock Exchange (the “TSX”) and the New York Stock Exchange (the “NYSE”) has been suspended.
Lion’s stock has lost 97.42% since its IPO, to settle at 25 cents. When the stock was worth $14.85, Lion founder Marc Bédard sold $16.5 million worth of shares.
Asked by The Journalthe office of the Minister of the Economy, Christine Fréchette, maintains the same line, saying it still hopes that “Lion finds buyers to ensure the continuity of its activities”.
Remember that Power Corporation is a major shareholder of lion and that last year, the Mirella and Lino Saputo Foundation, with Vincent Chiara’s Mach Group, provided $90 million in financing to Lion Électrique
Generous grants
The Journal revealed today that Lion has found a way to benefit twice from generous subsidies – up to $480,000 per vehicle – for defective trucks returned by dissatisfied customers.
According to our information, Lion offered around twenty of them to take back their truck which was not working well and replace it with a new vehicle.
At the end of November, an investigation by Journal had also highlighted haphazard vehicle development, insufficient road testing and massive cost overruns, according to several sources.
-Further details will follow.
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 entering 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.
