The ongoing struggles faced by Quebec-based Taiga as it tries to become an electric snowmobile and personal watercraft pioneer hit another snag when the company filed for the equivalent of bankruptcy protection in Canada.
The June 10, 2024, filing under the Canadian Companies Creditors Arrangement Act is similar to a Chapter 11 bankruptcy filing in the U.S. That means that the company is seeking protection from creditors while continuing it operations and operating under the watchful eyes of a count-appointed trustee. In this case, that trustee is the Deloitte Restructuring Inc. It is not to be confused with a Chapter 7 bankruptcy, which results in a closing of a business and liquidation of assets.
Many big companies (including Apple and General Motors, for example) have successfully emerged from a Chapter 11 filing. But more often a company filing for such protection will seek new investment or an outright sale. If that fails, though, a Chapter 7 may be down the road.
Taiga’s latest move follows layoffs and a production halt announced in April.
The Canada-based Financial Post posted an interesting background story on the Taiga saga on its website this afternoon. It’s worth a read for those curious about how Taiga got to this point and what may happen next.
Oddly, it was exactly 1 year ago today that we were in Vermont for a test drive of Taiga’s personal watercraft.
For the record, here’s the official announcement from Taiga, pasted directly below:
Taiga Obtains Interim DIP Facility and Interim Order for Creditor Protection under CCAA to Pursue a Restructuring and SISP Process
NEWS PROVIDED BY Taiga Motors Corp.
Jul 10, 2024, 13:30 ET
MONTREAL, July 10, 2024 /CNW/ – Taiga Motors Corporation (TSX: TAIG) (“Taiga” or the “Company“) today announced that Taiga and its subsidiaries (collectively, the “Taiga Group“) have sought and obtained from the Superior Court of Québec (the “Court“) (i) an order (the “Initial Order“) providing them with creditor protection pursuant to the Companies’ Creditors Arrangement Act (the “CCAA“), and (ii) an order authorizing the Taiga Group to pursue, under the supervision of the Court, a formal sale and investment solicitation process (the “SISP“), which process was initiated prior to the CCAA proceedings that were commenced today (the “CCAA Proceedings“).
As part of the Initial Order, the Court ordered, among other things, a stay of proceedings in favour of the Taiga Group for the initial period provided under the CCAA (the “Stay Period“) and the appointment of Deloitte Restructuring Inc. as monitor of the Taiga Group during the CCAA Proceedings (in such capacity, the “Monitor“), and it authorized the Taiga Group to enter into an interim financing facility (the “DIP Facility“) with Export Development Canada, the Company’s most significant secured creditor. The DIP Facility consists of a non-revolving multiple draw credit facility of up to a maximum principal amount of $4.4 million (of which the Court approved an initial draw and disbursement of $1.0 million in connection with the Initial Order), which will be used to finance the Taiga Group’s working capital requirements and to implement the restructuring contemplated in the CCAA Proceedings, including the pursuit of the SISP.
As disclosed in its various press releases and public filings leading up to this announcement, the Company has been actively reducing its cost structure and has been continuously seeking various alternatives to fund its operations. However, following a review and after careful consideration of all available alternatives and in consultation with legal and financial advisors, the directors of the Company unanimously determined that it was is in its best interests to commence the CCAA Proceedings, with a view to pursue the SISP and implement one or more transactions with respect to the Taiga Group’s business and assets.
The board of directors of the Company and management will remain responsible for the day-to-day operations of the Company under the general oversight of the Monitor.
It is anticipated that the Toronto Stock Exchange (the “TSX“) will place the Company under delisting review and there can be no assurance as to the outcome of such review or the continued qualification for listing on the TSX.
The Taiga Group will be returning before the Court shortly in order to seek the issuance by the Court of an amended and restated initial order, which, among other things, is expected to provide for an extension of the Stay Period until October 4, 2024 and a further required drawdown of funds under the DIP Facility.
About Taiga
Taiga (TSX: TAIG) is a Canadian company reinventing the powersports landscape with breakthrough electric off-road vehicles. Through a clean-sheet engineering approach, Taiga has pushed the frontiers of electric technology to achieve extreme power-to-weight ratios and thermal specifications required to outperform comparable high-performance combustion powersports vehicles. The first models released include a lineup of electric snowmobiles and personal watercraft to deliver on a rapidly growing demand from recreational and commercial customers who are seeking better ways to explore the great outdoors without compromise. For more information, visit www.taigamotors.com.
SOURCE Taiga Motors Corp.
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Per ACSA Taiga pursues sale
Taiga Motors Corporation says it has obtained an interim court order for creditor protection as well as one authorizing the company to launch a formal sale and investment solicitation process.
The Montreal-based electric snowmobile maker also says it has secured a line of credit from Export Development Canada — already a creditor — for up to $4.4 million.
The company says the money will be used to finance it and its subsidiaries’ capital requirements for restructuring under the Companies’ Creditors Arrangement Act.
In April, Taiga announced it would lay off 70 employees on top of 31 cut in January, amounting to a one-third workforce reduction so far this year as the company temporarily halted vehicle production after reporting a net loss $72.5 million for 2023.
Best EV sled by far so far but EV sleds are no where able to do what ICE sleds do for range etc.
JD/AC will buy them up to kick start there EV sled offering.
PWC sales for EV makes sense. No cold weather drawbacks, less or no water pollution.
Sleds is almost the opposite. Batteries lose over 50% in cold weather and don’t last long so have to be replaced causing more pollution environmental harm due to acids and rare earth minerals.
Who ever buys it it will cease production at Taiga and move to purchases manufacturing facilities. More likley only want the patents.
This is a very niche idea in an already niche market. These will only be good for guided tour type places. It will never be cost effective to build an infrastructure
Very little rumours or news on status of this company. Patents should be looked at as they have the most powerful EV sled out there by far.
Taiga needs to be at Hay Days to showcase their products, 99.9999% of sledders have never heard of or seen this remarkable sled. If you don’t know they exist and don’t see them you aren’t going buy them.
Come on Taiga make the trip to Hay Days it will be well worth it for your success and existence and to further the acceptance of EV recreational products.
Taiga if you want to succeed go to Hay Days 2024 ask for a spot or at least set up a spot in the swap met to showcase your products so that potential consumers can see your product and talk to you about the sleds and PWCs.
Better yet ask for a pass done the drag strip to showcase your performance just as Scorpion did a few years ago.
Even better have your sled race against the other brands stock sleds to see how it performs against the 2 stroke and 4 stroke competition.
This is a very low cost marketing awareness campaign and you will get massive free publicity form all the sled media and from tens of thousands on social media. It is make or break time Taiga.
100,000+ fans potential direct customers low cost great publicity and marketing. All the sled media there. You need to do this for your employees, investors and for the sport and industry. We wish you luck and success.
Even non sled media will pick up on this to see how a EV sled performs against conventional sleds.