Electric bus manufacturer Lion Electric Co. is temporarily laying off about 400 workers and halting operations at its Illinois factory to save cash after receiving a short-term lifeline from its lenders.
The Saint-Jerome, Quebec-based company made the announcement after a Saturday deadline to meet its obligations to key creditors passed. The extensions until Dec. 16 apply to a credit agreement with a syndicate of lenders and a loan provided by the Caisse de Depot et Placement du Quebec and Finalta Capital Inc., Lion said in a statement Sunday.
Lion said it received additional liquidity that will “provide 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.”
Lion, which went public in 2021, has run into a cash crunch while facing supply chain disruptions and a dispute with a battery supplier. Shares are down by almost 90% since this year, closing at about 18 cents in New York on Friday.
The workforce reduction in the US and Canada will leave Lion with about 300 employees, who will focus on bus manufacturing, sales and delivery, and customer support, according to the statement.
Quebec’s electric vehicle industry is going through a difficult period.
Montreal-based electric watercraft and snowmobile maker Taiga Motors Corp. was bought out in October by UK entrepreneur Stewart Wilkinson, while uncertainty surrounds a C$7 billion ($5 billion) EV battery factory near Montreal built by Swedish manufacturer Northvolt AB, which filed for bankruptcy protection on Nov. 21.
— By Randy Thanthong-Knight (Bloomberg)
