Lion Electric to initiate restructuring proceedings under the CCAA

The Lion Electric (LEV) Company announced 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 Quebec, 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 depot et placement du Quebec, as lender. The company had previously announced on December 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 December 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 December 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 and the New York Stock Exchange 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.