LION ELECTRIC ANNOUNCES ADDITIONAL AMENDMENTS TO CERTAIN SENIOR CREDIT INSTRUMENTS AND ADDITIONAL WORKFORCE REDUCTIONS
Lion Electric (NYSE: LEV) has secured amendments to its credit agreements, extending the suspension of financial covenants and loan maturity dates to December 16, 2024. The company is actively evaluating restructuring options, including potential business sale, strategic investments, or seeking creditor protection. Additionally, Lion announced a significant workforce reduction of approximately 400 employees through temporary layoffs across Canada and the United States, leaving about 300 employees focused on bus manufacturing, sales, and customer service. The company's Joliet, Illinois facility operations will be suspended as part of these measures.
Lion Electric (NYSE: LEV) ha ottenuto delle modifiche ai suoi accordi di credito, prorogando la sospensione dei vincoli finanziari e le date di scadenza dei prestiti fino al 16 dicembre 2024. L'azienda sta valutando attivamente opzioni di ristrutturazione, tra cui una possibile vendita dell'attività, investimenti strategici o la ricerca di protezione dai creditori. Inoltre, Lion ha annunciato una significativa riduzione della forza lavoro di circa 400 dipendenti attraverso licenziamenti temporanei in Canada e Stati Uniti, lasciando circa 300 dipendenti impegnati nella produzione di autobus, nelle vendite e nel servizio clienti. Le operazioni della struttura di Joliet, Illinois saranno sospese come parte di queste misure.
Lion Electric (NYSE: LEV) ha conseguido enmiendas a sus acuerdos crediticios, extendiendo la suspensión de los convenios financieros y las fechas de vencimiento del préstamo hasta el 16 de diciembre de 2024. La empresa está evaluando activamente opciones de reestructuración, incluyendo la posible venta del negocio, inversiones estratégicas o la búsqueda de protección para los acreedores. Además, Lion anunció una reducción significativa de su fuerza laboral de aproximadamente 400 empleados a través de despidos temporales en Canadá y Estados Unidos, dejando alrededor de 300 empleados enfocados en la fabricación de autobuses, ventas y servicio al cliente. Las operaciones de la instalación de Joliet, Illinois se suspenderán como parte de estas medidas.
라이온 일렉트릭 (NYSE: LEV)는 신용 계약의 수정안을 확보하여 재무 약정의 일시 정지와 대출 만기일을 2024년 12월 16일까지 연장했습니다. 이 회사는 사업 매각, 전략적 투자 또는 채권자 보호 요청을 포함한 구조 조정 옵션을 적극적으로 평가하고 있습니다. 또한, 라이온은 캐나다와 미국 전역에서 약 400명의 직원을 임시 해고하는 대규모 인력 감축을 발표했으며, 약 300명의 직원이 버스 제조, 판매 및 고객 서비스에 집중할 것입니다. 일리노이 주 졸리엣의 시설 운영은 이러한 조치의 일환으로 중단됩니다.
Lion Electric (NYSE: LEV) a obtenu des amendements à ses accords de crédit, prolongant la suspension des engagements financiers et des dates d'échéance des prêts jusqu'au 16 décembre 2024. La société évalue activement des options de restructuration, y compris la vente potentielle d'activités, des investissements stratégiques ou la recherche d'une protection auprès des créanciers. De plus, Lion a annoncé une réduction significative de son effectif d'environ 400 employés par le biais de licenciements temporaires à travers le Canada et les États-Unis, laissant environ 300 employés axés sur la fabrication de bus, les ventes et le service client. Les opérations de la structure de Joliet, Illinois seront suspendues dans le cadre de ces mesures.
Lion Electric (NYSE: LEV) hat Änderungen an seinen Kreditvereinbarungen gesichert, die die Aussetzung von finanziellen Covenants und die Fälligkeitstermine von Darlehen bis zum 16. Dezember 2024 verlängern. Das Unternehmen bewertet aktiv Umstrukturierungsoptionen, einschließlich eines möglichen Verkaufs des Geschäfts, strategischer Investitionen oder der Suche nach Gläubigerschutz. Darüber hinaus gab Lion eine signifikante Reduzierung der Belegschaft von etwa 400 Mitarbeitern durch vorübergehende Entlassungen in Kanada und den USA bekannt, während etwa 300 Mitarbeiter auf die Herstellung von Bussen, den Verkauf und den Kundenservice konzentriert bleiben. Die Betriebsstätte in Joliet, Illinois wird im Rahmen dieser Maßnahmen eingestellt.
- Secured extension of credit agreements to December 16, 2024
- Additional advance approved under Revolving Credit Agreement
- Permission to use portion of receivables for minimum liquidity needs
- Temporary layoff of 400 employees (57% workforce reduction)
- Suspension of Joliet, Illinois manufacturing operations
- Company exploring creditor protection options
- Potential restructuring or sale of business due to financial difficulties
- Uncertain outcome of restructuring alternatives
Insights
This is a critical development indicating severe financial distress at Lion Electric. The company is seeking multiple amendments to credit agreements and implementing significant workforce reductions, raising serious concerns about its operational viability. The layoff of 400 employees, reducing the workforce to just 300 and the suspension of operations at the Joliet facility signal a dramatic scaling back of operations.
The extension of covenant suspensions and loan maturity dates to December 16, 2024, coupled with the company actively exploring restructuring options, including potential CCAA protection (Canadian bankruptcy equivalent), suggests an imminent financial crisis. The mention of exploring business sale options and strategic investments indicates management is considering all alternatives for survival. The immediate focus on bus operations while scaling back other activities represents a last-ditch effort to preserve core business functions.
The severe downsizing and potential restructuring of Lion Electric reflects broader challenges in the commercial EV sector. The reduction to just 300 employees focused on bus operations suggests a strategic pivot to their most viable product line, but raises questions about the company's ability to maintain competitive positioning and product development. The suspension of the Illinois facility operations particularly impacts Lion's ability to serve the U.S. market and execute on existing orders.
This restructuring could create opportunities for competitors to capture market share in the commercial EV space, especially in the school bus segment where Lion has been a significant player. The company's struggles highlight the ongoing challenges of scaling up EV manufacturing while maintaining sufficient working capital.
In furtherance of the amendments, an additional advance will be made under the Revolving Credit Agreement and the Company will be permitted under the Finalta CDPQ Loan Agreement to use a limited portion of the receivables to be received by the Company in order to fund the Company's minimum liquidity needs until December 16, 2024. Such additional liquidity will also provide 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, including seeking creditor protection under the Companies' Credit Arrangement Act. There can be no assurance that the Company will be successful in pursuing and implementing any such alternatives, nor any assurance as to the outcome or timing of any such alternatives.
The Company also announced a reduction of its workforce through temporary layoffs of approximately 400 employees, in both Canada and
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 amendments entered into by the Company, potential alternatives relating to a restructuring of the Company's obligations, the Company's evaluation of other potential alternatives, 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 management's discussion and analysis 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 as at September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 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.
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