- Company to initiate restructuring proceedings under the
CCAA
MONTREAL, Dec. 17,
2024 /PRNewswire/ - The Lion Electric Company
(NYSE: LEV) (TSX: LEV) ("Lion" or the "Company"), a leading
manufacturer of all-electric medium and heavy-duty urban vehicles,
announced today the expiry of the previously announced covenant
relief period under its senior revolving credit agreement entered
into with a syndicate of lenders represented by National Bank of
Canada, as administrative agent
and collateral agent, and including Bank of Montreal and Federation des Caisses Desjardins
du Québec (the "Revolving Credit Agreement"), as well as the
maturity of the Company's loan agreement entered into with Finalta
Capital Fund, L.P., as lender and administrative agent, and Caisse
de dépôt et placement du Quebec
(through one of its subsidiaries), as lender (the "Finalta CDPQ
Loan Agreement").
The Company had previously announced on December 1, 2024 amendments to the Revolving
Credit Agreement and the Finalta CDPQ Loan Agreement in order to
extend the covenant relief period and the maturity date of the
Finalta CDPQ Loan Agreement to December 16, 2024, which
provided the Company with additional time to continue to actively
evaluate potential alternatives relating to a restructuring of its
obligations, a sale of the business or certain of its assets,
strategic investments and/or any other alternatives. As no such
alternatives have materialized and no further amendments,
concessions or waivers have been obtained, the expiry of the
covenant relief period and re-introduction of the financial
covenants previously applicable under the Revolving Credit
Agreement as well as the maturity of the Finalta CDPQ Loan
Agreement on December 16, 2024 result in the Company being in
default pursuant to the terms of the Revolving Credit Agreement,
the Finalta CDPQ Loan Agreement and other debt instruments
providing for cross-default or cross acceleration provisions, and
in the Company's lenders having the ability to exercise their
rights and request immediate repayment of amounts borrowed by the
Company.
As a result of the foregoing, the Company is currently in
discussions with its senior lenders to obtain additional funds
pursuant to a new debtor-in-possession credit facility and expects
to seek creditor protection under the Companies' Creditors
Arrangement Act in order to restructure its business and
financial affairs and pursue a formal sales and investment
solicitation process in respect of the Company's business or
assets.
Trading in the common shares and other listed securities of the
Company on the Toronto Stock Exchange ("TSX") and the New York
Stock Exchange (the "NYSE") has been halted and it is anticipated
that the trading thereof will continue to be halted until a review
is undertaken by the TSX and the NYSE regarding the suitability of
the Company for listing on the TSX and the NYSE.
ABOUT LION ELECTRIC
Lion Electric is an innovative manufacturer of
zero-emission vehicles, including all electric school buses. Lion
is a North American leader in electric transportation and designs,
builds and assembles many of its vehicles' components, including
chassis, battery packs, truck cabins and bus bodies.
Always actively seeking new and reliable technologies, Lion
vehicles have unique features that are specifically adapted to its
users and their everyday needs. Lion believes that transitioning to
all-electric vehicles will lead to major improvements in our
society, environment and overall quality of life. Lion shares are
traded on the New York Stock Exchange and the Toronto Stock
Exchange under the symbol LEV.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
securities laws and within the meaning of the United States Private
Securities Litigation Reform Act of 1995 (collectively,
"forward-looking statements"), including statements regarding the
Company's discussions with its senior lenders, a new
debtor-in-possession credit facility, the Company's expectations
that it will seek creditor protection under the Companies'
Creditors Arrangement Act, trading in the Company's common
shares and other listed securities, statements about Lion's beliefs
and expectations and other statements that are not statements of
historical facts. Forward-looking statements may be identified by
the use of words such as "believe," "may," "will," "continue,"
"anticipate," "intend," "expect," "should," "would," "could,"
"plan," "project," "potential," "seem," "seek," "future," "target"
or other similar expressions and any other statements that predict
or indicate future events or trends or that are not statements of
historical matters, although not all forward-looking statements may
contain such identifying words. The forward-looking statements
contained in this press release are based on a number of estimates
and assumptions that Lion believes are reasonable when made. Such
estimates and assumptions are made by Lion in light of the
experience of management and their perception of historical trends,
current conditions and expected future developments, as well as
other factors believed to be appropriate and reasonable in the
circumstances. However, there can be no assurance that such
estimates and assumptions will prove to be correct. By their
nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may
or may not occur in the future. For additional information on
estimates, assumptions, risks and uncertainties underlying certain
of the forward-looking statements made in this press release,
please consult section 23.0 entitled "Risk Factors" of the
Company's annual management's discussion and analysis of financial
condition and results of operations (MD&A) for the fiscal year
2023 and in other documents filed with the applicable Canadian
regulatory securities authorities and the Securities and Exchange
Commission, including the Company's interim MD&As. Many of
these risks are beyond Lion's management's ability to control or
predict. All forward-looking statements attributable to Lion or
persons acting on its behalf are expressly qualified in their
entirety by the cautionary statements contained and risk factors
identified in the Company's annual MD&A for the fiscal year
2023 and in other documents filed with the applicable Canadian
regulatory securities authorities and the Securities and Exchange
Commission. Because of these risks, uncertainties and assumptions,
readers should not place undue reliance on these forward-looking
statements. Furthermore, forward-looking statements speak only as
of the date they are made. Except as required under applicable
securities laws, Lion undertakes no obligation, and expressly
disclaims any duty, to update, revise or review any forward-looking
information, whether as a result of new information, future events
or otherwise.
See section 2.0 of the Company's interim MD&A for the three
and nine months ended September 30,
2024 (the "Interim MD&A"), entitled "Basis of
Presentation," section 15.0 of the Company's Interim MD&A
entitled "Liquidity and Capital Resources," and note 2 of the
Company's unaudited condensed interim consolidated financial
statements for the three and nine months ended September 30, 2024 which indicate the existence
of material uncertainty that may cast significant doubt on the
Company's ability to continue as a going concern.
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SOURCE The Lion Electric Co.