Electrovaya Announces Increase in Credit Facility to C$22 million

Rhea-AI Summary

Electrovaya Inc. increases its credit facility by C$6 million to C$22 million, with potential to expand to C$26 million, to support working capital needs for sales and production growth. The term has been extended to July 29, 2025, aiming to meet revenue targets and address purchase order backlog.

Insights

Financial Analyst

The expansion of Electrovaya's credit facility from C$16 million to C$22 million, with potential further increases up to C$26 million, signifies a strategic move to bolster the company's financial flexibility. This is particularly noteworthy as the enhanced credit line directly correlates with the company's working capital, which is essential for maintaining operational liquidity. The extended maturity term to July 2025 provides Electrovaya with a longer horizon to manage its debt obligations, potentially improving its balance sheet stability.

From a financial perspective, the ability to draw additional funds if needed ('uncommitted accordions') offers a buffer that can be critical in navigating the cyclical nature of the tech manufacturing sector. This additional liquidity could be instrumental in fulfilling the existing purchase order backlog, which is a positive indicator of demand for Electrovaya's products. However, investors should monitor the company's debt-to-equity ratio and interest coverage to assess the sustainability of its leverage levels.

Market Research Analyst

Electrovaya's focus on securing separate project financing for its planned Jamestown, New York gigafactory suggests an aggressive expansion strategy to capitalize on the growing demand for lithium-ion batteries. The gigafactory concept, popularized by industry leaders like Tesla, is a large-scale battery manufacturing plant designed to achieve economies of scale and reduce production costs. Electrovaya's investment in such a facility could significantly enhance its competitive position in the market.

As the electric vehicle and renewable energy sectors continue to gain momentum, the demand for high-capacity, efficient batteries is expected to surge. Electrovaya's move to secure additional working capital and project financing positions it well to meet this demand. However, the success of this strategy will depend on the company's ability to scale production while maintaining quality and managing costs effectively.

Legal Expert

The terms of the credit facility, including the uncommitted accordions, are likely to be governed by complex financial covenants and performance conditions. While the specifics are not disclosed, these covenants can significantly impact Electrovaya's operational flexibility. For instance, maintaining certain financial ratios might be a prerequisite for accessing additional funds. Stakeholders should be aware that breaching such covenants can lead to penalties or even acceleration of debt repayment, which could affect the company's financial health.

Furthermore, the extension of the term to maturity indicates a renegotiation of the original credit agreement, which may involve amended interest rates or other terms. Understanding these details is crucial for stakeholders to evaluate the potential impact on Electrovaya's cost of capital and its ability to invest in growth initiatives like the Jamestown gigafactory.

Increase in availability by C$6 million from current working capital facility with an 18 month term also including uncommitted accordions to increase the facility to C$26 million

TORONTO, ON / ACCESSWIRE / February 14, 2024 / Electrovaya Inc. ("Electrovaya" or the "Company") (NASDAQ:ELVA)(TSX:ELVA), a lithium ion battery technology and manufacturing company, today announced that its credit facility has been increased from C$16 million to C$22 million, with uncommitted accordions up to $4MM to increase the facility to C$26 million in the future. This facility will support the Company's working capital needs in connection with its continued sales and production growth. In addition, it has extended the term to maturity from March 31, 2024 to July 29, 2025.

"We are very pleased with the additional support our lender has provided to us," said John Gibson, CFO of Electrovaya. "We believe the additional working capital provided from the revolving credit facility will assist us with our continued growth and in meeting the existing purchase order backlog and fiscal year revenue targets."

The Company continues to work towards securing separate project financing to support its planned Jamestown, New York gigafactory.

For more information, please contact:

Investor and Media Contact:

Jason Roy
Director, Corporate Development and Investor Relations
Electrovaya Inc.
jroy@electrovaya.com
905-855-4618

Brett Maas
Hayden IR
elva@haydenir.com
646-536-7331

About Electrovaya Inc.

Electrovaya Inc. (NASDAQ:ELVA)(TSX:ELVA) is a pioneering leader in the global energy transformation, focused on contributing to the prevention of climate change by supplying safe and long-lasting lithium-ion batteries. The Company has extensive IP and designs, develops and manufactures proprietary lithium-ion batteries and battery systems for energy storage and heavy duty electric vehicles based on its Infinity Battery Technology Platform. This technology offers enhanced safety and industry leading battery longevity. The Company is also developing next generation solid state battery technology at its Labs division. Headquartered in Ontario, Canada, Electrovaya has two operating sites in Canada and has acquired a 52-acre site with a 135,000 square foot manufacturing facility in New York state for its planned gigafactory. To learn more about Electrovaya, please explore www.electrovaya.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements that relate to, among other things, revenue, purchase orders, revenue guidance, uncommitted accordions and revenue growth forecasts for the fiscal year ending September 30, 2024 . Forward-looking statements can generally, but not always, be identified by the use of words such as "may", "will", "could", "should", "would", "likely", "possible", "expect", "intend", "estimate", "anticipate", "believe", "plan", "objective" and "continue" (or the negative thereof) and words and expressions of similar import. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors and assumptions are applied in making forward looking statements, and actual results may differ materially from those expressed or implied in such statements. Statements with respect to the Company's intention to repay the promissory notes by the amended maturity date are based on an assumption that the Company will be able to repay the promissory notes by the amended maturity date. Factors that could cause actual results to differ materially from expectations include but are not limited to macroeconomic effects on the Company and its business, the Company's liquidity and cash availability in excess of its operational requirements, and the ability to generate and sustain sales orders. Additional information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the Company's Annual Information Form for the year ended September 30, 2023 under "Risk Factors", and in the Company's most recent annual and interim Management's Discussion and Analysis under "Qualitative And Quantitative Disclosures about Risk and Uncertainties" as well as in other public disclosure documents filed with Canadian securities regulatory authorities. The Company does not undertake any obligation to update publicly or to revise any of the forward looking statements contained in this document, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE: Electrovaya, Inc.

View the original press release on accesswire.com

FAQ

What is the new credit facility amount for Electrovaya Inc. after the increase?

Electrovaya Inc.'s credit facility has been increased from C$16 million to C$22 million.

What is the potential maximum facility amount after the uncommitted accordions?

There are uncommitted accordions up to $4 million to potentially increase the facility to C$26 million.

What is the new maturity date for the credit facility?

The term has been extended from March 31, 2024, to July 29, 2025.

What is the purpose of the increased credit facility for Electrovaya Inc.?

The increased credit facility aims to support the company's working capital needs for sales and production growth.

What are the future plans of Electrovaya Inc. regarding project financing?

Electrovaya Inc. is working towards securing separate project financing to support its planned gigafactory in Jamestown, New York.