Electric bus and truck maker Lion Electric has said it expects to seek creditor protection after defaulting on debt.
Protection under the Companies' Creditors Arrangement Act would be sought in order to allow a restructuring of the business and formal sales process, Lion Electric said Tuesday.
Lion Electric noted this would come after a covenant relief period on its senior revolving credit with lenders represented by National Bank of Canada (TSX:NA) had expired.
Maturity had also been reached on a loan agreement with the likes of Finalta Capital Fund, the company added.
Agreements had been reached to extend both deadlines earlier in the month in order to allow time for restructurings or sales of assets.
However, no such alternatives had materialized, Lion Electric said, resulting “in the company being in default” and “lenders having the ability to exercise their rights and request immediate repayment of amounts borrowed”.
Trading of Lion Electric’s shares had also been halted as a result, the company noted.