(Bloomberg) -- 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., according to a person familiar with the matter.
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, 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 — more than half of its employees — and said it’s suspending manufacturing at its facility in Joliet, Illinois.
Lion’s lenders, which include National Bank of Canada, gave it temporary help to get through the next two weeks, suspending for a second time the covenants on a credit line until Dec. 16. The maturity on a separate loan was pushed back to the same date. The extensions were granted to buy time for Lion Electric to find new investors or a buyer.
Quebec’s economy minister, Christine Frechette, told reporters Monday that the government “is prepared to provide more money if the business plan holds up, and if there are other players besides the public.” So far, the government has invested a total of C$192 million ($137 million) in Lion.
Shares of Lion soared as much as 188% on Monday, before paring those gains to trade at 42 Canadian cents, up 68%, as of 3:13 p.m. Toronto time.
Mach’s interest was reported earlier by the Journal de Montreal.
In 2023, Groupe Mach and the Mirella & Lino Saputo Foundation were part of a group of investors that bought C$90 million in senior secured debentures from Lion Electric.
A spokesperson for Lion did not reply to a request for comment.
(Update with comments from Quebec’s economy minister and a more recent share price beginning in the fifth paragraph.)
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