LION ELECTRIC ANNOUNCES FURTHER WORKFORCE REDUCTION IN THE CONTEXT OF ONGOING CCAA PROCEEDINGS
Lion Electric (NYSE: LEV) has announced a significant workforce reduction of approximately 150 employees across Canada and the United States, affecting all departments. This reduction leaves the company with around 160 employees who will primarily focus on customer support, maintenance, and servicing of school buses and trucks.
The layoffs are implemented as part of Lion's ongoing Companies' Creditors Arrangement Act (CCAA) proceedings and are required under the terms of the debtor-in-possession (DIP) financing provided by the company's senior revolving credit agreement lenders. The financing is intended to fund both the sale and investment solicitation process (SISP) and the company's operations during restructuring.
This follows the Superior Court of Quebec's initial order on December 18, 2024, granting CCAA protection to Lion and its subsidiaries, along with approval for the SISP.
Lion Electric (NYSE: LEV) ha annunciato una significativa riduzione della forza lavoro di circa 150 dipendenti in Canada e negli Stati Uniti, che coinvolge tutti i reparti. Questa riduzione lascia l'azienda con circa 160 dipendenti che si concentreranno principalmente sul supporto clienti, la manutenzione e il servizio di autobus scolastici e camion.
I licenziamenti sono stati attuati come parte del processo di Companies' Creditors Arrangement Act (CCAA) di Lion e sono richiesti ai sensi dei termini del finanziamento per il debitore in possesso (DIP) fornito dai creditori dell'azienda in base all'accordo di credito revolving. Il finanziamento è destinato a sostenere sia il processo di vendita e richiesta di investimenti (SISP) sia le operazioni dell'azienda durante la ristrutturazione.
Questo segue l'ordinanza iniziale della Corte Superiore del Quebec del 18 dicembre 2024, che concede la protezione CCAA a Lion e alle sue filiali, insieme all'approvazione per il SISP.
Lion Electric (NYSE: LEV) ha anunciado una reducción significativa de personal de aproximadamente 150 empleados en Canadá y Estados Unidos, afectando a todos los departamentos. Esta reducción deja a la empresa con alrededor de 160 empleados que se centrarán principalmente en el soporte al cliente, el mantenimiento y el servicio de autobuses escolares y camiones.
Los despidos se implementan como parte de los procedimientos de Companies' Creditors Arrangement Act (CCAA) de Lion y son requeridos bajo los términos del financiamiento para deudores en posesión (DIP) proporcionado por los acreedores de la empresa según el acuerdo de crédito rotativo. El financiamiento está destinado a financiar tanto el proceso de venta y solicitud de inversión (SISP) como las operaciones de la empresa durante la reestructuración.
Esto sigue a la orden inicial del Tribunal Superior de Quebec del 18 de diciembre de 2024, que otorga protección CCAA a Lion y sus subsidiarias, junto con la aprobación del SISP.
라이온 일렉트릭 (NYSE: LEV)은 캐나다와 미국 전역에서 약 150명의 직원을 감원한다고 발표했습니다. 이는 모든 부서에 영향을 미치며, 이로 인해 회사는 고객 지원, 유지 관리 및 학교 버스와 트럭 서비스에 주로 집중할 160명의 직원을 남기게 됩니다.
이번 감원은 라이온의 지속적인 기업 채권자 정리법(CSAA) 절차의 일환으로 시행되며, 회사의 상환신용계약 대출자에 의해 제공된 채무자 자산 보호(DIP) 자금 조달 조건에 따라 필수적입니다. 이 자금 조달은 판매 및 투자 유치 과정(SISP)과 재구성 기간 동안의 회사 운영을 지원하는 데 목적이 있습니다.
이번 결정은 2024년 12월 18일 퀘벡 주 대법원의 초기 명령에 따른 것으로, 라이온과 그 자회사를 CCAA 보호 아래 두고 SISP에 대한 승인을 받았습니다.
Lion Electric (NYSE: LEV) a annoncé une réduction significative de son effectif d'environ 150 employés au Canada et aux États-Unis, touchant tous les départements. Cette réduction laisse l'entreprise avec environ 160 employés qui se concentreront principalement sur le support client, l'entretien et le service des autobus scolaires et des camions.
Les licenciements sont mis en œuvre dans le cadre des procédures de Companies' Creditors Arrangement Act (CCAA) de Lion et sont requis en vertu des conditions du financement pour débiteur en possession (DIP) fourni par les créanciers de l'accord de crédit renouvelable de l'entreprise. Le financement vise à soutenir à la fois le processus de vente et de sollicitation d'investissement (SISP) et les opérations de l'entreprise pendant la restructuration.
Cela fait suite à l'ordonnance initiale de la Cour supérieure du Québec du 18 décembre 2024, qui accorde la protection CCAA à Lion et à ses filiales, ainsi qu'à l'approbation du SISP.
Lion Electric (NYSE: LEV) hat eine bedeutende Reduzierung der Belegschaft von etwa 150 Mitarbeitern in Kanada und den Vereinigten Staaten angekündigt, die alle Abteilungen betrifft. Diese Reduktion lässt das Unternehmen mit etwa 160 Mitarbeitern zurück, die sich hauptsächlich auf Kundenbetreuung, Wartung und Service von Schulbussen und Lastwagen konzentrieren wird.
Die Entlassungen werden im Rahmen der laufenden Companies' Creditors Arrangement Act (CCAA) Verfahren von Lion durchgeführt und sind erforderlich gemäß den Bedingungen der Finanzierung für Schuldner in Besitz (DIP), die von den Gläubigern der revolvierenden Kreditvereinbarung des Unternehmens bereitgestellt wurde. Die Finanzierung soll sowohl den Verkaufs- und Investitionserungsprozess (SISP) als auch die Unternehmensoperationen während der Restrukturierung unterstützen.
Dies folgt der ursprünglichen Anordnung des Obersten Gerichts von Quebec vom 18. Dezember 2024, die Lion und seine Tochtergesellschaften unter CCAA-Schutz stellt und die Genehmigung für den SISP erteilt.
- None.
- Significant workforce reduction of 150 employees, leaving only 160 staff
- Company under CCAA protection (bankruptcy proceedings)
- Restructuring process and sale of assets underway
- Operations dependent on DIP financing
Insights
This workforce reduction of 150 employees is a critical development in Lion Electric's CCAA restructuring process. The reduction to only 160 remaining employees represents a dramatic
The focus on maintaining customer service personnel for existing vehicles suggests a strategic decision to protect the company's service revenue stream and maintain customer relationships during restructuring. This approach is common in automotive sector restructurings, where post-sale service operations often remain profitable even when manufacturing operations struggle.
The timing of this announcement, following closely after the December 18th CCAA filing, indicates the company is moving swiftly to meet its DIP financing conditions and position itself for a potential sale through the SISP process. The rapid execution suggests pressure from creditors and a likely tight timeline for completing the restructuring process.
The layoffs signal a severe liquidity crisis and suggest Lion Electric's cash burn rate was unsustainable. By maintaining only essential service operations, the company is likely burning through minimal cash while seeking potential buyers or investors through the SISP process. This dramatic workforce reduction implies monthly operating costs will decrease significantly, though exact savings aren't disclosed.
The retention of service-focused employees indicates a strategy to maintain the most profitable segment of operations while eliminating cash-intensive manufacturing activities. Service operations typically generate higher margins and require less working capital than manufacturing. For investors, this suggests the company's core value may increasingly lie in its existing fleet service contracts rather than its manufacturing capabilities.
The Company was required to implement this workforce reduction in the context of its ongoing proceedings under the Companies' Creditors Arrangement Act ("CCAA") as per the terms and conditions of the debtor-in-possession (DIP) financing provided by the lenders under the Company's senior revolving credit agreement in connection with such proceedings, in order to fund the sale and investment solicitation process ("SISP") being conducted in the context of the proceedings as well as the Company's operations during the restructuring process.
As previously announced, the Superior Court of
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 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.
View original content:https://www.prnewswire.com/news-releases/lion-electric-announces-further-workforce-reduction-in-the-context-of-ongoing-ccaa-proceedings-302342038.html
SOURCE The Lion Electric Co.
FAQ
How many employees did Lion Electric (LEV) lay off in January 2024?
How many employees remain at Lion Electric (LEV) after the January 2024 layoffs?
When did Lion Electric (LEV) file for CCAA protection?
What is the purpose of Lion Electric's (LEV) DIP financing?
What will the remaining Lion Electric (LEV) employees focus on?
