Lion Electric finds buyer ahead of bankruptcy
According to Bloomberg, the insolvent Canadian commercial vehicle manufacturer Lion Electric is about to be rescued and could thus avoid liquidation that had been looming recently. A group of investors led by property magnate Vincent Chiara from Montreal will take over Lion Electric and provide new capital. The offer from Chiara and other investors still has to be approved by the court
It appears that Canadian authorities are open to the takeover, as the Quebec government has already committed to renewing a provincial program that provides substantial incentives to buyers of electric school buses. Lion is the country’s sole manufacturer of such vehicles.
Lion Electric has a fairly deep hole to climb out of, as the Bloomberg report notes: “As part of its bankruptcy filing, Lion disclosed that it owed more than $244 million to secured and non-secured creditors, according to its court-appointed monitor.”
The Canadian company’s financial troubles started in late 2023, when the company started laying off employees in North America, saying goodbye to about 10 per cent of its workforce. By the following summer, things were looking better for the commercial vehicle manufacturer, which had released a new truck model as well as secured a loan worth 7.5 million Canadian dollars. However, only one month later, another round of layoffs was announced.
By November 2024, the question was already clear whether the company would be able to survive on its own, which was followed by another round of layoffs in December 2024. Earlier this month, Lion Electric was getting ready for liquidation after the Quebec government pulled the plug on a public bailout.
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