MONTREAL, July 2, 2024
/PRNewswire/ - 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 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, (ii) its loan agreement entered into with Finalta
Capital and Caisse de dépôt et placement du Quebec, and (iii) its non-convertible
debentures issued in July 2023 to a
group of investors led by Mach Group and the Mirella & Lino
Saputo Foundation. The Company also announced the entering into of
a new agreement with Investissement Québec providing for a loan
under the ESSOR program in the amount of C$5,000,000, which loan may, under certain
conditions, be drawn up to C$7,500,000 (the "ESSOR loan").
The revolving credit agreement amendments provide for, among
other things, the suspension of the financial covenants currently
applicable under the revolving credit agreement until
September 30, 2024 (the "covenant relief period"), namely the
tangible net worth test and the springing fixed charge coverage
ratio. In furtherance of such amendments, the Company will be
required during the covenant relief period to maintain a minimum
amount of available liquidity (calculated based on the maximum
amount that can be drawn under the revolving credit facility and
cash on hand) of C$15,000,000,
subject to limited exceptions. Under the revolving credit agreement
amendments, the Company will also be subject to enhanced reporting
obligations and limitations on the use of any advances made under
the revolving credit facility until such time that the amount
available to be drawn under the revolving facility equals or
exceeds 50% of the total borrowing capacity under the revolving
facility for 30 consecutive days. The requirements relating to an
availability block and the funding of an interest reserve account
of C$10,000,000 upon availability
dropping below 30%, which were introduced in July 2023, are no longer applicable under the
revolving credit agreement amendments. Further, the revolving
credit agreement amendments provide for certain increases in the
applicable pricing grid and the effective deferral of the interest
payable under the revolving credit facility during the covenant
relief period. All other material terms and conditions of the
revolving credit agreement, including the August 11, 2025 maturity date and the general
affirmative covenants, restrictions, negative covenants and events
of defaults thereunder, remain substantially unchanged. For
additional details on the revolving credit agreement and the
revolving credit agreement amendments, please refer to the copies
thereof which will be available on the Company's profiles on SEDAR+
at www.sedarplus.ca and EDGAR at www.sec.gov.
The Company has also entered into the ESSOR loan in the amount
of C$5,000,000, which loan may, under
certain conditions, be drawn up to C$7,500,000. The ESSOR loan has an initial term
of three years, bears interest at a fixed annual rate of 13% per
annum and provides, subject to the terms and conditions therein,
for a moratorium of 12 months on the payment of any principal and
interest thereunder.
The Company also amended the 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, to provide for a minimum available liquidity requirement
aligned during the covenant relief period with the one added to the
revolving credit agreement pursuant to the credit agreement
amendments. Further, the loan agreement amendments provide for an
increase in the applicable interest rate to 13% and capitalization
of 50% of the interest payable during the covenant relief period.
All other material terms and conditions of the amended loan
agreement, including the November 6,
2024 maturity date, remain substantially unchanged.
The Company also amended the non-convertible debentures issued
in July 2023 to a group of investors
led by Mach Group and the Mirella & Lino Saputo Foundation to
provide for the capitalization of 50% of the interest payable under
the non-convertible debentures during the covenant relief
period.
The Company will continue to actively evaluate different
opportunities that may enable it to improve its liquidity and
strengthen its financial position. Such opportunities may include
certain refinancing initiatives related to its debt instruments
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.
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 regarding the
amendments entered into by the Company, its ability to remain in
compliance with the terms and conditions of its debt instruments
and to have access to sufficient cash to meet its operational
needs, its evaluation of other opportunities, 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.
With respect to the financing opportunities for the Company,
there can be no assurance that the Company will be successful in
pursuing and implementing any such opportunities, nor any assurance
as to the outcome or timing of any such opportunities, including
whether the Company will be able to remain in compliance with the
terms and conditions of its debt instruments and to have access to
sufficient cash to meet its operational needs.
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SOURCE The Lion Electric Co.
