Could be worse. You could own Vicinity. Electric vehicle stock Vicinity Motor (TSXV:VMC) has fallen by approximately 50 per cent after receiving letters from Royal Bank of Canada and Export Development Canada (EDC) demanding full payment of outstanding debt under their respective credit facilities.
Royal Bank expects payment of US$19,202,242 plus C$45,251 by Aug. 19, 2024 – though Vicinity’s books recorded the larger total as US$16,241,641 – while EDC has demanded immediate payment of US$8,625,000 plus interest of US$54,231. Both institutions chose to not renew the facilities, which were set to roll over the debt on July 16.
As interest, costs, fees and expenses under the credit facilities continue to accrue, Vicinity is also facing the harsh reality that its US$77.8 million in assets as of March 31 will be at risk, should it fail to repay it debt. Its lenders have already provided notice of their intention to gain ownership of what they can under the Bankruptcy and Insolvency Act (Canada), leaving the company to engage with them “to carry on in some form in the future,” as Friday’s news release ominously states.