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The Lion Electric Company, a leading manufacturer of all-electric medium and heavy-duty urban vehicles, has announced additional amendments to its senior credit instruments and further workforce reductions. The amendments extend the suspension of financial covenants and maturity dates for both its senior revolving credit agreement and its loan agreement with Finalta Capital and Caisse de dépôt et placement du Quebec (CDPQ). Additionally, the company is enacting temporary layoffs impacting 400 employees across its North American operations.
Key Highlights
- Amendments to Credit Agreements: Extension of financial covenant suspensions and maturity dates to December 16, 2024.
- Additional Funding Access: Additional liquidity to fund minimum operational needs until the extended maturity date.
- Potential Strategic Alternatives: The company is evaluating options including restructuring, sale of assets, strategic investments, or creditor protection.
- Workforce Reduction: Temporary layoffs affecting approximately 400 employees, impacting both Canadian and U.S. operations.
- Manufacturing Suspension: Production at the Joliet, Illinois facility is suspended.
These additional amendments are aimed at extending the timeline for Lion Electric to explore strategic alternatives for its financial obligations, including potential restructuring, a sale of the business, or other strategic options. Under the Revolving Credit Agreement, additional liquidity will be made available, and under the Finalta CDPQ Loan Agreement, a limited portion of receivables can be used to meet the company’s minimum liquidity needs until December 16, 2024. This extension gives Lion more time to consider various financial alternatives, but there is no guarantee of a successful outcome or timeline for implementing these solutions.
In addition to the credit amendments, Lion Electric has announced a significant workforce reduction of approximately 400 employees, spread across all departments in both Canada and the United States. This reduction leaves the company with about 300 remaining employees who will focus on bus manufacturing, sales, delivery, and customer service operations. The Joliet, Illinois manufacturing facility will also see a suspension of operations as a consequence of these layoffs.
Lion Electric remains a leader in the production of zero-emission vehicles, including electric school buses, which are designed and built to meet the unique needs of their users. The company maintains that transitioning to all-electric vehicles will improve society, the environment, and quality of life. Lion’s shares are traded on both the New York Stock Exchange and the Toronto Stock Exchange under the symbol LEV.
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