MONTREAL, Canada – The Lion Electric Company (NYSE: LEV) (TSX: LEV) (“Lion” or the “Company”), a leading manufacturer of all-electric medium and heavy-duty urban vehicles, announced today that it has entered into further amendments to certain of its senior credit instruments, namely (i) its senior revolving credit agreement entered into with a syndicate of lenders represented by National Bank of Canada, as administrative agent and collateral agent, and including Bank of Montreal and Federation des Caisses Desjardins du Québec (the “Revolving Credit Agreement”), and (ii) its loan agreement entered into with Finalta Capital Fund, L.P., as lender and administrative agent, and Caisse de dépôt et placement du Quebec (through one of its subsidiaries), as lender (the “Finalta CDPQ Loan Agreement”).
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.
