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The Lion Electric Company, a prominent manufacturer of all-electric medium and heavy-duty vehicles, has announced its application for creditor protection under Canada’s Companies’ Creditors Arrangement Act (CCAA). This step follows financial challenges, including the expiration of a covenant relief period and loan maturity issues. Lion also plans to seek recognition of the CCAA proceedings in the United States under Chapter 15 of the Bankruptcy Code.
Key Highlights:
- Application Details: Lion seeks a court-approved sale and investment solicitation process (SISP) to explore transaction opportunities for the company and its stakeholders.
- DIP Financing: The application includes approval for debtor-in-possession financing to fund operations during restructuring.
- Oversight: Deloitte Restructuring Inc. is proposed as the monitor for the proceedings, ensuring court oversight while management retains operational responsibilities.
- Trading Halt: Trading of Lion’s securities has been suspended on the NYSE and TSX, with the TSX initiating a delisting review.
The initial court order also includes a stay of proceedings, protecting the company and its subsidiaries from creditor claims and contractual rights exercises during the restructuring. Lion’s senior lenders will provide interim financing to sustain operations and the SISP process.
This development follows Lion’s December 17, 2024 announcement about financial difficulties, including the maturity of loan agreements with Finalta Capital and Caisse de dépôt et placement du Québec. The halted trading on the TSX and NYSE reflects ongoing reviews regarding the company’s listing eligibility.
About Lion Electric
Lion Electric is a leader in zero-emission vehicle manufacturing, producing electric school buses and other transportation solutions. The company designs and assembles key components in-house, including battery packs and vehicle chassis. Lion is committed to advancing electric vehicle adoption, aiming for environmental and societal benefits through reduced emissions. Its shares are listed under the symbol LEV on the NYSE and TSX.
This restructuring process underscores the challenges faced by the electric vehicle industry, even for innovative leaders like Lion Electric.
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