Lion Electric insolvent | Nearly 150 buyers approached

Nearly 150 potential buyers and liquidators have already been approached to get their hands on Lion Électrique, which has been insolvent for three weeks. Electric trucks, with which the Quebec manufacturer seems to be experiencing significant difficulties, are left out of the recovery plan that is being dangled to investors.

Even after having solicited 136 potential buyers and 11 “other parties”, such as liquidators, we have not finished knocking on doors, underlines the most recent report from restructuring specialists at Deloitte, Benoit Clouâtre and Jean-François Nadon , who act as controllers in this folder.

“This approach aims to probe the market thoroughly and engage potential investors who may have expressed interest outside of initial approaches,” they write.

Representatives of Deloitte will return this Tuesday before Judge Michel Pinsonnault of the Superior Court of Quebec, who supervises the procedures taking place under the Companies’ Creditors Arrangement Act (LACC).

In addition to taking stock of what has been put in place since December 18, the date Lion filed for bankruptcy, we will request an extension of the current procedures until February 14.

Unable to replenish its coffers and short of cash, Lion turned to the CCAA in hopes of finding a way to revive itself. This collapse of the company considered a symbol of the electrification of transport in Quebec puts nearly 200 million of public money at risk.

As of September 30, Lion had a debt of 293 million while its total receivables – which notably take into account amounts owed to suppliers – amounted to 500 million US dollars.

Last Friday, the company laid off about half of its remaining workforce. Nearly 150 people continue to provide service to customers for the maintenance of school buses and trucks.

Trucks away

The revised draft business plan sent to potential buyers, which The Press was able to consult, puts aside the ambitions of grandeur once cherished by senior management and founder Marc Bédard.

“The company has prepared a revised and streamlined business plan focused on electric school buses and the repatriation of all manufacturing activities to Quebec with profitability at modest volume levels,” specifies the document prepared by National Bank Financial .

Ultimately, there does not appear to be any plan to restart the 900,000 square foot factory located in Illinois, which opened in July 2023 and which cost Lion nearly $150 million.

To reach the break-even point, it will be necessary to produce 550 electric school buses annually in Saint-Jérôme, according to the business plan. An acceleration of production will therefore be necessary. After the first nine months of 2024, Lion had only sold 386 vehicles.

Everything indicates that the construction of electric trucks will find itself on the sidelines. There is growth potential for these products, but “beyond” the initial business plan.

It is also suggested that these opportunities may result in the sale of technology licenses, Lion intellectual property and remaining inventory.

For the moment, there is no guarantee that trucks will begin to be built again in the Quebec company’s workshops.

In testimonies collected by -, four former managers and two former technicians, who are not named, also considered that the truck construction methods were faulty at Lion. Some cited production problems as well as lower finishing quality than the competition.

In response to information from the public broadcaster, the Quebec manufacturer refuted the allegations of its former employees by affirming that they “lack credibility” in addition to being “ [dénuées] of any foundation.”