MONTREAL — 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 the Company and its subsidiaries have applied to the Superior Court of Quebec (Commercial Division) (the “Court”) for an initial order to seek protection from their creditors under the Companies’ Creditors Arrangement Act (“CCAA”). The Company and its subsidiaries also intend to seek recognition of the CCAA proceedings in the United States under Chapter 15 of the Bankruptcy Code.

In its application for an initial order, the Company seeks the approval of a formal sale and investment solicitation process (“SISP”) in order to provide interested parties with the opportunity to submit proposals with a view to enabling the Company and its senior lenders to determine the highest and best available transaction for the Company and its stakeholders.

The initial order application seeks, among other things, a stay of proceedings in favor of the Company and its subsidiaries, including a stay of creditor claims and exercise of contractual rights, and the authorization of an interim debtor-in-possession (DIP) financing to be provided by the lenders under the Company’s senior revolving credit agreement in order to fund the SISP and the Company’s operations during the restructuring process. Approval is also being sought for the appointment of Deloitte Restructuring Inc. as monitor to oversee the CCAA proceedings and report to the Court. While under CCAA protection, management of the Company will remain responsible for the day-to-day operations of the Company under the oversight of the monitor.

This announcement follows the press release issued by the Company on December 17, 2024 announcing the expiry of the covenant relief period under the Company’s senior revolving credit agreement and maturity of the Company’s loan agreement with Finalta Capital and Caisse de dépôt et placement du Quebec.

Trading in the common shares and other listed securities of the Company on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (the “NYSE”) has been halted. The TSX has also put the Company under delisting review under its expedited review process. It is anticipated that trading in the Company’s listed securities will continue to be halted until completion of the review undertaken by the TSX and the NYSE regarding the suitability of the Company for listing on the TSX and the NYSE.

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.

The post Lion Electric File Application for Credit Protection Under the CCAA appeared first on School Transportation News.

The deadline passed for Lion Electric Company to repay loans needed to overcome hundreds of millions in debt, but the school bus manufacturer is not heading into bankruptcy, a company spokesperson said.

The statement made to School Transportation News on Tuesday came amid a Lion press release earlier in the day that highlighted use of the Companies Credit Arrangement Act (CCAA), a Canadian federal law dating back to 1933 that allows insolvent companies to avoid liquidation. This occurs through court-directed compromise or arrangement made by a debtor company and its secured creditors.

Lion on Wednesday formally applied for CCAA protection. It also said it will seek recognition of the CCAA process under chapter 15 of the U.S. bankruptcy code.

In the press release on Tuesday, Lion said it “is currently in discussions with its senior lenders to obtain additional funds pursuant to a new debtor-in-possession credit facility and expects to seek creditor protection” under the CCAA as it seeks to restructure its business and financial affairs. Lion added it pursues a formal sales and investment solicitation process for the company’s business or assets.

The Lion spokesperson referred to the CCAA proceedings as a “stable and structured environment” for various restructuring measures under a Revolving Credit Agreement with two lenders represented by the National Bank of Canada and a loan agreement with Finalta Capital Fund that expired on Monday. No timeline was given for when the CCAA agreements will be finalized.

On Dec. 1, Lion announced the latest of four amendments to the Revloving Credit Agreement and an extension of the Finalta Capital loan agreement, a halt to all production at its manufacturing plant in Joliet, Illinois, and the laying off an additional 400 workers on top of the 120 employees laid off in April. The company has trimmed its workforce from nearly 1,300 employees to about 300.

A separate SEC filing that same day announced the Nicolas Brunet resigned as president.
Four days later, Lion said it reached an agreement to sell its Quebec innovation center for $35 million U.S. The company noted in its third-quarter financial results total liabilities of $500 million and a net loss of nearly $75 million as of Sept. 30.

Related: Brunet Resigns as Lion Electric President Amid Company Battle to Stay Solvent
Related: Updated: Lion Electric Suspends Manufacturing Operations at Joliet Plant
Related: NYSE to Commence Delisting Proceedings with Respect to the Warrants of Lion Electric

The post Update: Lion Electric Defaults on Credit Repayment, Says It is Avoiding Bankruptcy appeared first on School Transportation News.

MONTREAL — 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 the expiry of the previously announced covenant relief period under 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”), as well as the maturity of the Company’s 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 company had previously announced on Dec. 1, 2024 amendments to the Revolving Credit Agreement and the Finalta CDPQ Loan Agreement in order to extend the covenant relief period and the maturity date of the Finalta CDPQ Loan Agreement to Dec. 16, 2024, which provided 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. As no such alternatives have materialized and no further amendments, concessions or waivers have been obtained, the expiry of the covenant relief period and re-introduction of the financial covenants previously applicable under the Revolving Credit Agreement as well as the maturity of the Finalta CDPQ Loan Agreement on Dec. 16, 2024 result in the company being in default pursuant to the terms of the Revolving Credit Agreement, the Finalta CDPQ Loan Agreement and other debt instruments providing for cross-default or cross acceleration provisions, and in the company’s lenders having the ability to exercise their rights and request immediate repayment of amounts borrowed by the company.

As a result of the foregoing, the company is currently in discussions with its senior lenders to obtain additional funds pursuant to a new debtor-in-possession credit facility and expects to seek creditor protection under the companies’ Creditors Arrangement Act in order to restructure its business and financial affairs and pursue a formal sales and investment solicitation process in respect of the company’s business or assets.

Trading in the common shares and other listed securities of the Company on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (the “NYSE”) has been halted and it is anticipated that the trading thereof will continue to be halted until a review is undertaken by the TSX and the NYSE regarding the suitability of the Company for listing on the TSX and the NYSE.

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.

The post Lion Electric Announces Expiry of Covenant Relief Period and Defaults Under Certain Conditions of Senior Debt Instruments appeared first on School Transportation News.