Fledgling Canadian electric truck maker Vicinity Motor Corp.’s future is in doubt, after lenders RBC and Export Development Canada (EDC) submitted letters demanding full repayment of their respective outstanding debt balances.
Vicinity owes RBC US$19.2 million and EDC $16.2 million. RBC demanded payment by Aug. 10, and EDC immediately.
The VMC 1200 electric truck. (Photo: James Menzies)
If Vicinity fails to pay its debt balances, the lenders have said they will pursue action under the Bankruptcy and Insolvency Act to recover their investments.
“The company will engage in discussions with its creditors to evaluate potential solutions to enable the company to carry on in some form in the future; however, there can be no assurances it will be able to successfully do so,” Vicinity disclosed in a news release.
“The Secured Lenders may enforce their security and/or a receiver or receiver manager may be appointed. Vicinity intends to pursue all available options afforded by law to resolve these matters while continuing to support its customer base.”
As of March 31, Vicinity had US$77.8 million in assets including property, plant and equipment as well as inventory. It only had US$4.3 million in cash and cash equivalents on hand at the time.
“The company has been impacted by continued supply chain impacts to its production efficiency, lower than anticipated demand for the VMC 1200 [truck], higher than anticipated working capital requirements to support production backlog and insufficient support from lenders,” the company said of its troubles.
Quebec-based Lion Electric has also suffered from the slower-than-expected transition to electric commercial vehicles. In its July 31 earnings report, Lion announced it will shed 30% of its workforce and take on other cost-cutting measures.
Source link
#Vicinitys #future #question #lenders #demand #debt #payments #full
