LION ELECTRIC ANNOUNCES FURTHER AMENDMENTS TO CERTAIN SENIOR CREDIT INSTRUMENTS
Lion Electric (NYSE: LEV) has secured amendments to its senior credit instruments, including the Revolving Credit Agreement and Finalta CDPQ Loan Agreement. The changes extend the financial covenant suspension period to November 30, 2024, and remove minimum liquidity requirements. The company warns it may not comply with credit terms after the relief period or repay the Finalta CDPQ Loan at maturity. Lion Electric is in discussions with lenders about restructuring and exploring alternatives, including potential business sale, strategic investments, or asset sales.
Lion Electric (NYSE: LEV) ha ottenuto delle modifiche ai suoi strumenti di credito senior, inclusi l'Accordo di Credito Rotativo e il Prestito Finalta CDPQ. Le modifiche estendono il periodo di sospensione delle covenants finanziarie fino al 30 novembre 2024 e rimuovono i requisiti minimi di liquidità. L'azienda avverte che potrebbe non essere in grado di conformarsi ai termini di credito dopo il periodo di rilascio o di rimborsare il Prestito Finalta CDPQ alla scadenza. Lion Electric è in discussione con i creditori riguardo a una ristrutturazione e all'esplorazione di alternative, inclusa la potenziale vendita dell'attività, investimenti strategici o vendite di beni.
Lion Electric (NYSE: LEV) ha conseguido enmiendas a sus instrumentos de crédito senior, incluido el Acuerdo de Crédito Revolvente y el Acuerdo de Préstamo Finalta CDPQ. Los cambios extienden el período de suspensión de los convenios financieros hasta el 30 de noviembre de 2024 y eliminan los requisitos mínimos de liquidez. La empresa advierte que podría no cumplir con los términos de crédito después del período de alivio o devolver el Préstamo Finalta CDPQ al vencimiento. Lion Electric está en conversaciones con los prestamistas sobre la reestructuración y la exploración de alternativas, incluyendo la posible venta del negocio, inversiones estratégicas o ventas de activos.
라이온 일렉트릭 (NYSE: LEV)은 회전 신용 계약 및 파이널타 CDPQ 대출 계약을 포함한 선순위 신용 수단에 대한 수정 사항을 확보했습니다. 이러한 변경 사항은 재무 약정의 유예 기간을 2024년 11월 30일까지 연장하고 최소 유동성 요건을 제거합니다. 회사는 구제 기간 이후 신용 조건을 준수하지 못하거나 만기 시 파이널타 CDPQ 대출을 상환하지 못할 수 있다고 경고합니다. 라이온 일렉트릭은 재구성을 위한 대출 기관과 논의 중이며, 잠재적인 사업 매각, 전략적 투자 또는 자산 매각을 포함한 대안을 모색하고 있습니다.
Lion Electric (NYSE: LEV) a obtenu des modifications de ses instruments de crédit senior, y compris l'Accord de Crédit Rotatif et le Contrat de Prêt Finalta CDPQ. Les changements prolongent la période de suspension des engagements financiers jusqu'au 30 novembre 2024 et suppriment les exigences de liquidité minimale. La société avertit qu'elle pourrait ne pas respecter les conditions de crédit après la période de répit ou rembourser le Prêt Finalta CDPQ à l'échéance. Lion Electric est en discussions avec les créanciers concernant une restructuration et l'exploration d'alternatives, y compris une vente potentielle de l'entreprise, des investissements stratégiques ou des ventes d'actifs.
Lion Electric (NYSE: LEV) hat Änderungen an seinen vorrangigen Kreditinstrumenten, einschließlich des revolvierenden Kreditvertrags und des Finalta CDPQ-Darlehensvertrags, gesichert. Die Änderungen verlängern den Zeitraum der Aussetzung finanzieller Covenants bis zum 30. November 2024 und heben die Mindestliquiditätsanforderungen auf. Das Unternehmen warnt, dass es nach dem Erleichterungszeitraum möglicherweise nicht in der Lage ist, die Kreditbedingungen einzuhalten oder das Finalta CDPQ-Darlehen bei Fälligkeit zurückzuzahlen. Lion Electric befindet sich im Gespräch mit den Kreditgebern über eine Umstrukturierung und die Erkundung von Alternativen, einschließlich eines möglichen Verkaufs des Unternehmens, strategischer Investitionen oder Vermögensverkäufe.
- Secured temporary relief from financial covenants until November 30, 2024
- Removal of minimum liquidity requirements from credit agreements
- Risk of default after November 30, 2024 covenant relief period
- May be unable to repay Finalta CDPQ Loan at maturity
- Considering potential sale of business or assets due to financial distress
- Risk of immediate loan repayment demands from lenders
Insights
The financial situation at Lion Electric appears increasingly precarious. The company has secured only a short-term covenant relief extension until November 30, 2024 and faces significant challenges with its credit agreements. The removal of minimum liquidity covenants, while providing temporary flexibility, signals serious cash flow concerns.
Most concerning is the company's explicit acknowledgment that it may not maintain compliance with credit terms after the relief period or meet the
The amendments reveal a deteriorating credit profile with multiple red flags. The extremely short covenant relief extension of just 15 days suggests lenders have growing concerns about Lion's financial health. The requirement to strictly adhere to cash flow projections and contingency plans indicates tight lender oversight and operational flexibility.
The company's disclosure about potential inability to comply with credit terms or repay debt represents a material going concern risk. The exploration of restructuring alternatives, including potential business sale, suggests the company is preparing for various distressed scenarios. Investors should note that cross-default provisions could trigger a cascade of repayment obligations across the debt structure.
The amendments to the Revolving Credit Agreement provide for, among other things, the extension of the period applicable to the previously announced suspension of the financial covenants thereunder from November 15, 2024, to November 30, 2024 (the "covenant relief period") and the removal of the minimum liquidity covenant under the Credit Agreement during the covenant relief period. The amendments to the Finalta CDPQ Loan Agreement provide for, among other things, the removal of the minimum liquidity covenant thereunder and the addition of restrictions on the Company's use of receivables to be received by the Company during the period. The Company will also be required under each of the Revolving Credit Agreement and the Finalta CDPQ Loan Agreement during the covenant relief period to comply in all respects with cash flow projections and a contingency plan agreed to with the lenders.
In the event the Company cannot raise additional funds or negotiate amendments, concessions or waivers with its lenders, the Company expects that it will not be able to remain in compliance under the terms of the Revolving Credit Agreement and Finalta CDPQ Loan following expiry of the covenant relief period or repay the amounts owed under the Finalta CDPQ Loan upon maturity on November 30, 2024. Any breach under the Company's debt instruments could result, either directly or as a result of the application of cross default or cross acceleration provisions, in the Company's lenders exercising their rights thereunder, including to request immediate repayment of amounts borrowed by the Company. As a result, the Company has been actively engaged in discussions with certain of its lenders regarding potential alternatives relating to a restructuring of its obligations. The Company also continues to fully consider all potential sources of financing and/or other alternatives, which alternatives may include a sale of the business or certain of its assets, strategic investments and/or any other similar opportunities or alternatives.
ABOUT LION ELECTRIC
Lion Electric is an innovative manufacturer of zero-emission vehicles. The Company creates, designs and manufactures all-electric class 5 to class 8 commercial urban trucks and 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, the Company's ability to remain in compliance under its debt instruments, discussions regarding potential alternatives relating to a restructuring of the Company's obligations, the Company's evaluation of other opportunities or 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 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.
FAQ
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