Lion Electric Announces Amendments and Workforce Reductions
Lion Electric Company (LEV) announced significant changes on Sunday, including amendments to its senior credit instruments and workforce reductions. These moves aim to improve the company's financial standing and explore strategic alternatives for its future.
Lion Electric amended its senior revolving credit agreement and loan agreement with Finalta Capital and Caisse de dépôt et placement du Québec. These amendments extend the financial covenant suspensions and maturity dates from November 30, 2023, to December 16, 2023. This additional liquidity will allow Lion Electric to meet its minimum operational needs and explore strategic alternatives.
The company stated that the strategic alternatives it will explore may include restructuring obligations, asset sales, or seeking creditor protection. These options aim to improve the company's financial health and ensure its long-term viability.
Lion Electric also announced temporary layoffs of approximately 400 employees across Canada and the United States. This reduces its workforce to around 300 employees total. The remaining employees will focus on vehicle manufacturing, sales, delivery, and servicing. As a result of the workforce reduction, the company has suspended its manufacturing operations at its Joliet, Illinois facility.
Following these announcements, Lion Electric Company shares experienced a significant increase. At the time of writing, LEV shares were up 64.1% at 31 cents, according to Benzinga Pro. This surge in price reflects investor optimism regarding the potential benefits of the company's strategic changes.