The Lion Electric Company (LEV-T) will sell its innovation centre in Mirabel, Qué. to the Montréal–Trudeau International Airport for $50 million to help relieve a debt burden that has been weighing down the company.

On Thursday afternoon, the electric bus maker said the proceeds from the sale, expected to close in 2024, will be used for partial repayment of senior secured non-convertible debentures issued in July 2023.

The move is expected to reduce long-term debt, but will not address Lion Electric’s more immediate liquidity and cash position, it added.

Financial troubles have forced the electric bus maker to lay off hundreds of workers this year and ask for extensions on credit and loan facilities. A sale of the company or its assets and investments are possibilities Lion Electric said it is considering if it cannot secure additional funding.

Located at Montréal-Mirabel International Airport, the research and development site is paired with Lion Electric’s battery manufacturing plant, neighbouring its headquarters and assembly plant in Saint-Jérôme.

In its Q3 financials, Lion Electric reported holding over US$143 million in long-term debt and other debts as of Sept. 30.

The airport said it will occupy the approximately 193,000-square-foot innovation centre with its aerospace innovation zone.

Lion's battery manufacturing and innovation facility

Lion Electric’s aim was to be the first Canadian manufacturer of medium and heavy-duty vehicles to have its own automated battery pack and module manufacturing capability, the company told Sustainable Biz Canada in 2021.

“One of the main things that we gain from it is a lot of operational efficiency,” Brian Alexander, then the director of public relations, said. “We’re also going to have cost savings – we’re not buying batteries, modules and packs from many different sources and then integrating them into our own packs.”

The 1.6-million-square-foot building’s cost was pegged at $185 million when announced in 2021, with Lion Electric contributing $85 million and the Canadian and Quebec governments each contributing $50-million loans.

Lion Electric geared the innovation centre to improving the performance, range and energy capacity of its products.

Annual production capacity of the battery factory was put at five gigawatt-hours, enough to supply approximately 14,000 medium and heavy-duty vehicles per year.

The plan for the batteries from Mirabel was to send them to Lion Electric’s 900,000-square-foot Joliet, Ill. electric vehicle production facility, where operations were paused this week following the company’s latest setbacks. In July, Lion Electric’s CEO Marc Bedard said the company was in discussions to sublease the Illinois facility.

Investors consider saving Lion

To pull out of its financial hole, Bedard said Lion Electric was focused on streamlining operations through steps such as shifting manufacturing to a batch-size approach, selling battery packs to third parties and further cost reductions.

On the funding side, Le Journal de Montréal reported Lion Electric investors were interested in creating a consortium to maintain the company. But the effort hinges on the support of the Saputo family, which has not yet finalized its decision.

If private investors keep Lion Electric afloat, the Quebec government will also contribute funding, the province’s economy minister Christine Frechette said, according to Bloomberg News.