Electric school bus and truck manufacturer Lion Electric Company appears headed for dissolution after a last-ditch effort to obtain government funding fell through.
The company reportedly owes $244 million to secured and non-secured creditors.
Christine Frechette, Quebec’s minister of economy, innovation and energy, posted on X Wednesday that the Quebec government will not reinvest in Lion after passing on a recovery plan that was submitted to save the manufacturer but on a limited scale.
“This is a difficult, but responsible decision. It’s a local company that offers an innovative product that contributes to the energy transition. The government has a responsibility to support the growth of Quebec businesses,” she posted. “We believed in Lion’s potential, but the submitted recovery plan did not justify the re-injection of significant government sums. Unfortunately, one thing is clear: Granting new funds to Lion Electric would not be a responsible decision.”
A Lion Electric spokesman had not responded to questions from School Transportation News at this report.
Meanwhile, Bloomberg News reported that an investment group created the recovery plan that would have resulted in Lion Electric only manufacturing electric school buses going forward out of its St. Jerome plant. But the province already lost $128 million U.S. in investments into Lion with the Canadian federal government losing another $30 million U.S. Ottawa had also invested in Lion.
Power Corp. of Canada, according to Bloomberg, was the largest Lion shareholder with a 34-percent stake but has already written down its Canadian $81 million position in the company to zero.
Montreal-based online newspaper La Presse broke the news Wednesday, reporting that an unnamed U.S. investment firm expressed serious interest in purchasing the Lion assets, but the Quebec proposal had been the most promising.
La Presse also reported that Lion will likely be sold off in parts, which would mean the end of the company. It laid off all its employees, including those in the U.S., and ceased operations except for a select few senior executives working out of Quebec to try and salvage the company. Deloitte is overseeing the the company’s insolvency proceedings and an auction of its assets.
There are about 2,000 Lion Electric school buses at school districts and school bus companies across North America that will need maintenance and customer service going forward.
This is a developing story.
Related: Lion Electric Customers Have Options Despite Insurmountable Debit Forcing the Manufacturer to Auction
Related: Update: Lion Electric Defaults on Credit Repayment, Says It is Avoiding Bankruptcy
Related: Brunet Resigns as Lion Electric President Amid Company Battle to Stay Solvent
