2023-07-17 21:20:44
(Photo: Electric Lion)
Pending profitability, Lion Electric has mobilized 142 million US dollars (US$ million), or approximately 187 million Canadian dollars (M$), from Quebec partners, including Investissement Québec and the Fonds de solidarité FTQ, to finance its activities.
The funding, announced on Monday, will allow the electric bus and truck maker to fund its operations.
The Fonds FTQ, Fondaction de la CSN and Investissement Québec will together invest an amount of US$74 million to obtain convertible debentures at an interest rate of 13%.
The Saputo family, through the Mirella and Lino Saputo Foundation, as well as Groupe Mach, of Montreal investor Vincent Chiara, will purchase 11% non-convertible debentures for an amount of US$90 million. They will also receive warrants to purchase 22.5 million common shares at a unit price of $2.81. At the close of financial markets on Friday, the stock was worth $2.78 on the Toronto Stock Exchange.
The company announced that it is extending the maturity of certain debts by one year, until August 2025.
This new financing comes at a time when some analysts believed that Lion Electric would need more cash to fund its operations before achieving profitability. “This financing transaction represents a key milestone for Lion, as it gives us the flexibility to execute on our growth plans,” company founder and CEO Marc Bédard said in a statement.
In March, management forecast that its capital expenditures would reach nearly US$65 million in 2023, the equivalent of $87 million. These sums will be allocated to its American school bus plant in Joliet, Illinois, and to its battery plant in Mirabel, in the Laurentians region.
In April, Marc Bédard indicated that expenses would decrease significantly in 2024. “The good news is that our investments are almost complete at the end of this year.”
The announcement was well received by investors. The stock gained 41 cents, or 14.75%, to $3.19 on the Toronto Stock Exchange Monday morning. The stock price is still 87% below its summer 2021 high.
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