A Quebec Superior Court judge has approved the sale of vehicle-maker Lion Electric to a group of Quebec investors, giving the struggling manufacturer a new lease on life.
During a hearing Thursday morning, Justice Michel Pinsonnault said the deal is the only option that ensures the company can keep operating.
“This is the only potential transaction that makes sense,” he said. “There are no others.”
The decision comes five months after Lion Electric sought protection from its creditors in December. Earlier this month, it seemed the company was headed for liquidation, but an eleventh-hour offer will allow Lion to preserve its manufacturing plant in St-Jérôme, Que.
The consortium of investors is led by Pierre Wilkie, a director of the electric-vehicle company, and Montreal real estate entrepreneur Vincent Chiara. It’s unclear how much they offered for Lion, but the amount has been described in court as “meagre.”
“It’s not the transaction we expected to get approved when we began the process,” Guy Martel, a lawyer for the company, told the judge on Wednesday. “But unfortunately, it’s the only one we’re able to present to you.”
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Martel said there has been an unusual number of “twists and turns” in the company’s restructuring process. A previous offer from the investor group fell apart after the Quebec government announced last month it would not inject any more public funds into Lion Electric. News reports said the investors were seeking $24 million in government money.
The province has already invested heavily in the company, and Premier François Legault has said the government stands to lose about $140 million.
After that decision, the court-appointed monitor for the company said Lion would likely be liquidated. But the consortium came back with a reduced offer on May 9, after receiving assurances that the Quebec government would renew a subsidy program for electric school buses to the tune of nearly $500 million.
Lion Electric will relaunch with reduced operations, and focus on building electric school buses at its St-Jérôme plant. Hundreds of employees will be permanently laid off and the equipment at a battery pack assembly plant in Mirabel, Que., will be sold off. The company has already shut down production at a plant in Joliet, Ill.
The union representing workers at the St-Jérôme plant said Thursday it was pleased with the court’s decision.
“The last few months have been a roller-coaster of emotions,” said Éric Rancourt, a representative of the International Association of Machinists and Aerospace Workers. “What has been resolved today will help maintain jobs in St-Jérôme and preserve our expertise in the electrification of school transportation in Quebec.”
He said the deal will also be good news for school bus operators in the province, who will be able to receive service and spare parts for the 1,175 Lion buses already on the roads.
