03:46 PM EST, 12/02/2024 (MT Newswires) -- Mach Capital, the investment arm of Canadian real estate developer Groupe Mach Inc., is in discussions to provide more funding to cash-strapped electric bus manufacturer Lion Electric Co. ( LEV ), according to a person familiar with the matter, Bloomberg is reporting on Monday.

But the firm will invest only if members of Montreal's Saputo family are also willing to put in more cash to help save the company, the person said, speaking on the condition they not be named because the talks are private.

Mach is conducting due diligence on Lion Electric ( LEV ), according to the person, as the manufacturer goes through a wrenching restructuring to preserve what little cash it has left. On Sunday, Lion announced the layoff of 400 people and said it's suspending manufacturing at its facility in Joliet, Illinois.

Earlier today Lion (LEV.TO, LEV), a manufacturer of all-electric vehicles, with its shares last seen up 60% on the TSX, over the weekend said it will cut more than half its workforce through temporary layoffs in Canada and the United States as it restructures its operations.

The company will be left with about 300 employees who will focus on bus manufacturing, sales and delivery, and customer assistance, the company said. Manufacturing at its Joliet, Illinois, plant will be suspended.

The company also said it secured additional liquidity to have time to evaluate potential alternatives that may include a restructuring, a sale of the business or certain assets, or credit protection under the Companies' Credit Arrangement Act.

The additional liquidity will come by way of amendments to the company's senior revolving credit agreement with a syndicate of lenders and loan agreement with Finalta Capital and Caisse de depot et placement du Quebec.

The amendments extend the period applicable to the suspension of the financial covenants under the revolving credit agreement from Nov. 30 to Dec. 16 and extend the maturity date under the loan agreement from Nov. 30 to Dec. 16.

An additional advance will be made under the revolving credit agreement and the company will be allowed under the loan agreement to use part of the receivables to fund its minimum liquidity needs until Dec. 16.

The syndicate of lenders are represented by National Bank of Canada as administrative agent and collateral agent and includes Bank of Montreal and Federation des Caisses Desjardins du Quebec.

Lion Electric's ( LEV ) shares were last seen up $0.165 to $0.42 on the Toronto Stock Exchange.

Price: 0.41, Change: +0.16, Percent Change: +60.78