(Bloomberg) – Canadian electric bus and truck maker Lion Electric Co. is unlikely to survive because the Quebec government rejects the opportunity to put money into the company with local investors.
Provincial Economy Minister Christine Frechette said in an article on X: “We believe in the potential of the lion, but the submitted recovery plan does not prove the reinfusion of large amounts of government money.
The Quebec government has lost 177 million Canadian dollars ($128 million) of Lion and Canadian government investments of 30 million Canadian dollars. The company failed to repay some of its debts, could not find the buyer of the business or its assets, and applied for creditor protection in December.
An investor group involving real estate tycoon Vincent Chiara has developed a plan to try to revive the company, but is smaller. Under the plan, the Lions will focus on building electric school buses at the factory in St. Room, Quebec, and stop producing commercial and tractor trucks.
The Lion thrives during the electric vehicle boom, with a market capitalization of $4.2 billion in 2021 and grows to 1,400 employees next year. Then, the electric car market has gone through tough times and it has become increasingly difficult for manufacturers to raise funds.
As demand weakens, the company’s subsidy and incentive programs in Canada and the United States are delayed, supply chain disruptions and amplification challenges.
More than 40 of the 169 parties linked to potential investors have implemented non-public agreements, according to a report released by the Lion’s Bankruptcy Monitor (February). Quebec-based media La Presse reported that a U.S. investment company that spoke on condition of anonymity was very interested in the asset, but the Quebec Group is the most promising group.
La Presse reported Wednesday night that the lion could now be sold as parts, meaning the end of the company. The expected closure could prevent maintenance services from being carried out by many bus owners in Canada and the United States. There are more than 2,200 lion cars on the roads in North America.
According to the list provided by the monitor, the Lion owes a total of $244 million to secure and non-safe creditors. The largest Canadian National Bank is CAD 47 million. Caisse de Depot et Placement in Quebec is also a creditor.
Canada’s Power Corp., the company’s largest shareholder owns a 34% stake, wrote its $81 million zero position.
The Lions have closed operations at their battery assembly plants in Joliet, Illinois and Mirabell, Quebec.
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