Vicinity Motor Corp. (TSX-V:VMC) announced it has secured US$30 million in credit commitments from Royal Bank of Canada (RBC) and Export Development Canada (EDC) to fund the production of the company's VMC 1200 class 3 electric truck.
The Vancouver-based commercial electric vehicle (EV) maker said the credit commitment is designed for use with the VMC 1200 all-electric class 3 truck and can be used for up to 100% of eligible production costs on the vehicle, excluding labor and overheads from its assembly plants. The interest rate on the new facility will be prime plus 2% and will be secured by the existing assets of the company.
"This new US$30 million credit commitment with our partners at RBC and EDC will prove invaluable as we begin to ramp VMC 1200 production, providing us with the working capital necessary to monetize our significant 1,100-unit order backlog," Vicinity founder and CEO William Trainer said in a statement.
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"We are confident in our ability to scale production given that the VMC 1200 supply chain is largely unaffected by the global pressures impacting the transit bus business," Trainer added.
Vicinity said deliveries and upfitting of the VMC 1200 will be facilitated from its Aldergrove, British Columbia and Ferndale, Washington production facilities. The company is well positioned to capture share in a growing market, following draft legislation for light-duty vehicles that was proposed in Canada on December 21, 2022, requiring automakers and importers to meet zero-emissions vehicle sales quotas, it added.
In addition to the US$30 million credit commitment for the VMC 1200 trucks, Vicinity said RBC will continue to provide it with C$10 million in an asset-backed loan (ABL) for use with its existing bus orders and a US$3 million letter of credit facility. The additional facility is in the final stages of documentation and due diligence and is expected to be in place by February of 2023, it added.
"The VMC 1200 is a truly revolutionary vehicle and will prove to be a transformational product for Vicinity - the demand we have seen to date is incredible,” Trainer continued. "I would like to personally thank our investors, as well as the Royal Bank of Canada and Export Development Canada, for their continued support as we strive to deliver long-term value for both our shareholders and customers.”
Vicinity Motor is a North American supplier of electric vehicles for both public and commercial enterprise use. It leverages a dealer network and close relationships with world-class manufacturing partners to supply its flagship electric, CNG and clean-diesel Vicinity buses, the VMC 1200 electric truck and a VMC Optimal-EV shuttle bus.
In addition, the company sells its proprietary electric chassis, alongside strategic partner J.B. Poindexter’s business unit EAVX, for upfitting into next-generation delivery vehicles.
Contact the author at stephen.gunnion@proactiveinvestors.com