Lion Electric has obtained leniency from its lenders and a new loan of up to $7.5 million from the Legault government as the electric truck and bus manufacturer seeks to replenish its coffers.
Published at 12:06 p.m.
This room for maneuver, the details of which were announced Tuesday, did not seem to reassure investors. On the Toronto Stock Exchange, around mid-session, the share price of the company based in Saint-Jérôme was down 4.9%, or six cents, to trade at $1.17.
The Quebec manufacturer has reached an agreement with the Ministry of Economy, Innovation and Energy for a $5 million loan, with a fixed annual interest rate of 13%. The agreement provides for a “12-month moratorium” on interest and principal payments.
In addition, under “certain conditions”, which have not been specified, the loan could reach 7.5 million.
At the same time, Lion said it has reached agreements with seven lenders, including the Caisse de dépôt et placement du Québec, the Mach Group and the Mirella and Lino Saputo Foundation, to obtain flexibility and other modifications to loans.
Under severe financial pressure, Lion has made some 370 layoffs and dismissals in Quebec and the United States since last fall. The company has some 1,150 employees.
As of March 31, there was only US$5 million left in Lion’s coffers.
Some 300 employees at its Saint-Jérôme assembly plant have also opted for unionization by joining the International Association of Machinists and Aerospace Workers (IAMAW).
The union also wants to establish itself in other Lion factories, notably those located in Mirabel (battery packs) and Joliet, Illinois.
Public money in Lion Electric
- 2008–2021: $7 million in grants from the Quebec government for research and development
- 2021: 19 million from Investissement Québec (IQ) for the purchase of shares
- 2021: 100 million in loans from Quebec and Ottawa
- 2022: 15 million in loans from the Caisse de dépôt et placement du Québec
- 2023: 98 million loaned by IQ and the Fonds de solidarité FTQ
