Here's what you need to know:
- A group of Quebec-based investors are purchasing and relaunching Lion Electric, which had filed for bankruptcy protection in December.
- The Quebec and Canadian federal governments had already invested approximately $207 million CAD in total but declined to provide further funding.
- Lion's Joliet, Illinois factory was scheduled for auction on May 21, but it's unclear if the sale will proceed.
- Lion’s EV buses have faced mechanical and safety problems.
Lion Electric is getting another shot at life thanks to a group of Quebec-based investors who have agreed to purchase and relaunch the company.
[Related: Lion Electric files for bankruptcy protection]
According to The Canadian Press, the consortium of investors is led by real estate developer Vincent Chiara and Pierre Wilkie, who is also a director of the bankrupt battery-electric vehicle (BEV) manufacturer.
Lion sought bankruptcy protection from investors last December following months of mounting financial issues. The new agreement is being presented to a Quebec Superior Court judge today, May 16, for approval.
Another government financial lifeline was no longer an option for Lion.
The Quebec government had already invested about $177 million CAD into Lion while the Ottawa government provided another $30 million CAD, only to see the company go under.
Last month, a different investor group attempted to purchase Lion, under condition of an additional money injection from Quebec, which ultimately refused. Liquidation was the expected next and final phase until we learned of today's news.
But last week, the investors made a new offer after confirming that Quebec would renew a subsidy program for electric school buses, which expired in March. This ultimately set the new bid into motion.
Earlier this week, Lion's 900,000 sq. ft. Joliet, Ill. factory, which built battery-electric school buses, was given a May 21 auction date. It's still too early to know whether this will change or be cancelled outright.
Lion suspended Ill. production late last year.
[Related: Bankrupt Lion Electric's Illinois school bus factory up for auction]
Lion's now possible revival will be welcome news to several school districts in Canada and the U.S. who purchased its EV buses. However, there have been reports of mechanical and technical malfunctions with serious safety concerns, including at least one bus catching on fire. There were no reported injuries.
Lion's probable new owners may also have to contend with a New York law firm investigating whether the company previously committed federal securities fraud in the U.S.
