Electrovaya Secures $20M Credit Facility from Bank of Montreal to Accelerate Growth and Reduce Costs

Rhea-AI Summary

Electrovaya (NASDAQ/TSX: ELVA) has secured a US$20 million credit facility from Bank of Montreal (BMO) Corporate Finance, featuring a three-year term and a US$5 million expansion option. The senior secured asset-based lending facility includes:

• Lower interest rates and fees, reducing capital costs
• Support for both US and Canadian operations
• Ancillary credit products for foreign currency hedging and credit cards
• Access to United States Export-Import Bank (EXIM) financing for Jamestown manufacturing investments

The facility aims to strengthen Electrovaya's financial position and support its growth plans in lithium-ion battery technology and manufacturing. According to CEO Dr. Raj Das Gupta, this agreement will improve working capital access while enabling vertical integration of battery manufacturing in the United States.

Positive

• Secured US$20M credit facility with lower interest rates and fees
• Additional US$5M accordion expansion option available
• Access to EXIM financing for US manufacturing expansion
• Improved working capital availability for operations
• Reduced debt servicing costs

Negative

• Takes on new debt obligations
• Requires asset-based collateral security

Insights

Financial Analyst

Electrovaya's new $20M credit facility with BMO represents a significant financial improvement for the company. For context, this facility equals roughly 23% of Electrovaya's $87.4M market capitalization, making it a material transaction that substantially enhances their financial flexibility.

The facility offers three key financial advantages: lower interest rates reducing debt servicing costs, extended maturity with a three-year term providing stability, and growth potential through the additional $5M accordion option. Most importantly, this facility creates a pathway to EXIM financing for capital investments at their Jamestown manufacturing facility through an intercreditor agreement.

This refinancing addresses several financial challenges simultaneously. By replacing higher-cost debt, Electrovaya immediately improves its cash flow position. The revolving nature of the facility allows for more flexible working capital management across both U.S. and Canadian operations. The ancillary products for foreign currency hedging also reduce FX risk exposure for this dual-listed company operating across borders.

For a growth-stage lithium-ion battery manufacturer competing in a capital-intensive industry, securing lower-cost institutional debt financing from a major bank represents a significant vote of confidence in Electrovaya's business model and growth trajectory.

Manufacturing Expert

This financing structure directly addresses manufacturing expansion challenges in Electrovaya's lithium-ion battery production strategy. The dual-jurisdiction capability spanning both U.S. and Canadian operations creates operational flexibility that's particularly valuable for a company with manufacturing facilities in multiple locations.

The most strategically significant element is the intercreditor agreement enabling access to EXIM Bank financing. This provides Electrovaya a potential pathway to secure additional capital specifically for their Jamestown facility investments. EXIM financing typically comes with favorable terms for U.S. manufacturing initiatives, potentially allowing Electrovaya to accelerate their vertical integration strategy at lower capital costs.

In the competitive battery manufacturing landscape, where scale and integration drive unit economics, this financing structure positions Electrovaya to pursue vertical integration more aggressively. Vertically integrated production capabilities typically deliver three advantages: supply chain risk reduction, margin improvement, and quality control enhancement.

The $5M accordion feature provides a responsive capital mechanism to address production bottlenecks or expansion opportunities without renegotiating their entire facility. This agility in capacity expansion timing can be important in meeting customer demand in the rapidly growing electric vehicle and industrial equipment battery markets.

Three year term includes an accordion of US$5.0 million expansion option to fuel future growth

Lower-cost facility replaces existing debt, reducing servicing costs

Supports operations in both the United States and Canada and enables financing from the United States Export-Import Bank ("EXIM") for Jamestown manufacturing investments

TORONTO, ONTARIO / ACCESS Newswire / March 10, 2025 / Electrovaya Inc. ("Electrovaya" or the "Company") (NASDAQ:ELVA)(TSX:ELVA), a leading lithium-ion battery technology and manufacturing company, is pleased to announce that it has closed a credit agreement with the Bank of Montreal Corporate Finance ("BMO") for a senior secured asset based lending facility (the "Facility") which includes a three year term and which includes the following features:

• Revolving asset based facility of US $20.0 Million

• Accordion of US $5.0 million to support further growth when required

• Ancillary credit products for foreign currency hedging and credit cards

This facility lowers Electrovaya's cost of capital with reduced interest rates and fees, strengthening its financial position for expansion. The new Facility, with an initial three year term, will support Electrovaya's growth plans over the next few years and includes lending capabilities for both Electrovaya's US and Canadian operations. Importantly, the BMO facility enables financing from the United States Export-Import Bank ("EXIM") for Jamestown manufacturing investments through an intercreditor agreement.

"Our new banking facility with BMO Corporate Finance provides Electrovaya with improved working capital access while reducing costs to support our U.S and International growth plans," said Dr. Raj Das Gupta, CEO of Electrovaya. "Furthermore, the facility enables corresponding financing from EXIM to support our pursuit of vertically integrated lithium ion battery manufacturing in the United States. We look forward to a strong partnership with the BMO Corporate Finance team as we continue our mission of driving broad adoption of our leading lithium-ion battery technology."

Investor and Media Contact:

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

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 without compromising energy and power. The Company has extensive IP and designs, develops and manufactures proprietary lithium-ion batteries, battery systems, and battery-related products for energy storage, clean electric transportation, and other specialized applications.Electrovaya has two operating sites in Canada and a 52-acre site with a 135,000 square foot manufacturing facility in Jamestown New York state for its planned gigafactory. To learn more about how Electrovaya is powering mobility and energy storage, please explore www.electrovaya.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements that relate to, among other things, other financial projections, working capital, cost of capital, cash flow anticipated in FY 2025, the Company's requirements for additional financing, purchase orders, mass production schedules, funding from EXIM and the ability to satisfy the conditions to drawing on any facility entered into with EXIM, the ability to utilize the accordion for $5 million of additional capital, ability to sustain a long term partnership with BMO, ability to deliver to customer requirements. 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. In making the forward-looking statements included in this news release, the Company has made various material assumptions, including but not limited to assumptions with respect to the Company's customers deploying its products in accordance with communicated intentions, the Company's customers completing new distribution centres in accordance with communicated expectations, intentions and plans, anticipated new orders in FY 2025 based on customers' historical patterns and additional demand communicated to the Company and its partners, the Company's ability to successfully execute its plans and intentions, including with respect to the entry into new business segments and servicing existing customers, the availability of financing on reasonable commercial terms, including the EXIM facility. Factors that could cause actual results to differ materially from expectations include but are not limited to customers not placing orders roughly in accordance with historical ordering patterns and communicated intentions, macroeconomic effects on the Company and its business, and on the lithium battery industry generally, not being able to obtain financing on reasonable commercial terms or at all, including not being able to satisfy any condition of drawdowns under the EXIM facility, that the Company's products will not perform as expected, supply and demand fundamentals for lithium-ion batteries, the risk of interest rate increases, persistent inflation in the United States and Canada and other macroeconomic challenges, the political, economic, and regulatory and business stability of, or otherwise affecting, the jurisdictions in which the Company operates, including new tariff regimes. 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, 2024 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 and filed or furnished with the SEC.. 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 ACCESS Newswire

FAQ

What are the key terms of Electrovaya's (ELVA) new credit facility with BMO?

The facility includes a US$20M revolving asset-based lending with a 3-year term, US$5M accordion expansion option, and ancillary credit products for currency hedging and credit cards.

How will the BMO credit facility benefit Electrovaya's (ELVA) financial position?

The facility reduces capital costs through lower interest rates and fees while providing improved working capital access for both US and Canadian operations.

What is the purpose of EXIM financing in Electrovaya's (ELVA) credit agreement?

EXIM financing will support Electrovaya's Jamestown manufacturing investments, enabling vertical integration of lithium-ion battery manufacturing in the United States.

How long is the term of Electrovaya's (ELVA) new BMO credit facility?

The credit facility has an initial three-year term.