01:09 PM EDT, 07/18/2023 (MT Newswires) -- Lion Electric announced concurrent financing transactions of US$142 million, comprised of US$74 million of convertible debentures and C$90 million of non-convertible debentures carrying a 13% and 11% interest rates, respectively. The debentures come along with some stock issuance and purchase warrants for 22.5 million shares at an exercise price of C$2.81/share.
Alongside the financing, LEV announced it will extend its senior credit facilities an additional year and cancel its ATM program. The transaction removes funding risk for LEV, which has weighed on the stock and supports is scale-up, with US$30 million being directed to LEV's Mirabel battery facility and $14 million to its Joliet facility, in order to reach a total capacity of 5,000 vehicles/yr.
Reduced funding risk is positive, though LEV still faces commercial and operational risks, notes analyst Rupert Merer.
Reiterate price target of US$2.75/sh based on a 1.3x EV/sales multiple on 2024E, compared to peers at 1.6x. Maintain Outperform.
Price: 3.17, Change: +0.19, Percent Change: +6.38