Electrovaya announces the sale-leaseback of its headquarters in Mississauga for approximately CDN$22.5 million
July 27 2018 - 7:59AM
Electrovaya Inc. (“Electrovaya” or the “Company”) (TSX:EFL)
(OTCQX:EFLVF) announces that it has entered into a binding
agreement for the sale-leaseback of its headquarters at 2645 Royal
Windsor Drive in Mississauga, Ontario (the “Property”) for
approximately $22.5 million. Net proceeds to the Company are
expected to be $21 million before transaction expenses, subject to
customary closing adjustments, and will be used to pay down debt
and for working capital purposes.
Under the terms of the agreement, the
transaction is expected to close at 5:00 pm (Toronto time) on
September 18, 2018 (the “Completion Date”). The sale is on an “as
is, where is” basis and also provides that as of the Completion
Date, Electrovaya will lease back from the buyer certain premises
located on the Property. The agreement also provides that the terms
of the formal lease will be settled by August 31, 2018, and will
provide for the following:
- The leased premises shall consist of approximately 50,000
square feet of warehouse space and 4,000 square feet of office
space.
- Electrovaya shall be responsible for its proportionate share of
all operating costs, utilities and realty taxes and such costs
shall be payable by Electrovaya as additional rent.
- The term will be for three years from the Completion Date.
- Both Electrovaya and the buyer shall have the option of early
termination by providing at least six months’ written notice to the
other party.
The transaction is expected to have the effect
of unlocking liquidity from the Company’s non-core real estate to
reinvest in its growing lithium ion battery business. Electrovaya
has excess space at its headquarters that is no longer necessary as
it transitions to greater use of contract manufacturing. The
Company expects this will have the further effect of reducing
overhead costs and increasing scalability as the Company focuses on
high-margin subassemblies and battery systems. As of the Completion
Date, Electrovaya will be leasing approximately 54,000 square feet
of space, compared to the 156,000 square feet it presently
occupies.
Electrovaya is focused on producing lithium ion
battery systems for the Materials Handling Electric Vehicle sector,
an expanding market opportunity. The Company produces batteries for
newly-manufactured electric trucks, and replacement batteries for
existing fleets currently powered by lead acid batteries.
Electrovaya has received initial and follow-up purchase orders from
multiple Fortune 500 companies, and recently completed a landmark
order from Walmart Canada, which replaced the lead acid batteries
in all forklifts at a distribution centre with Electrovaya’s
lithium ion batteries. This site represents one of the largest
lithium ion installations at a distribution centre in North
America.
For more information, please
contact:
Peter KovenBay Street CommunicationsTelephone:
1.647.496.7857Email: peterkoven@baystreetcommunications.com
About Electrovaya Inc.
Electrovaya Inc. (TSX:EFL) (OTCQX:EFLVF)
designs, develops and manufactures proprietary Lithium Ion Super
Polymer® batteries, battery systems, and battery-related products
for energy storage, clean electric transportation and other
specialized applications. Headquartered in Ontario, Canada,
Electrovaya is a technology focused company with extensive IP,
supplying leading global customers.
To learn more about how Electrovaya is powering
mobility and energy storage, please explore
www.electrovaya.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains forward-looking
statements, including statements that relate to, among other
things: the net proceeds from the transaction to the Company;
whether the transaction will close on time and otherwise as
described herein, or at all; the terms of the formal lease, and in
particular as they relate to the total square-footage of space to
be leased in terms of warehouse space and office space and the date
by which the formal lease will be settled; whether the disposition
will have the further effect of reducing overhead costs and
increasing scalability; and the Company’s objectives, goals,
strategies, intentions, beliefs, expectations and estimates.
Forward-looking statements can generally be identified by the use
of words such as “may”, “will”, “could”, “should”, “would”,
“likely”, "possible", “expect”, “intend”, “estimate”, “anticipate”,
“believe”, “plan”, “objective” and “continue” (or the negative
thereof) and words and expressions of similar import. Although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, such statements involve
risks and uncertainties, and undue reliance should not be placed on
such statements. Certain material factors or assumptions are
applied in making forward-looking statements, and actual results
may differ materially from those expressed or implied in such
statements. Material assumptions used to develop forward-looking
information in this news release include, among other things, that
the transaction will close on the expected terms and in the
expected timeframe, that current customers will continue to make
and increase orders for the Company’s products, that the Company’s
alternate supply chain will be adequate to replace material supply
and manufacturing, that the Company’s interpretation of the effect
of any comfort given to Litarion’s auditors of the Company’s
financial support for Litarion’s operations is correct, and that
Litarion’s insolvency process will proceed in an orderly fashion
that will satisfy Litarion’s debt without a significant negative
effect on the Company or its assets. Important factors that could
cause actual results to differ materially from expectations include
but are not limited to: actions taken by creditors and remedies
granted by German courts in the Litarion insolvency proceedings and
their effect on the Company’s business and assets, negative
reactions of the Company’s existing customers to Litarion’s
insolvency process, the ability to sell the Company’s premises or
to do so at a price reflecting appropriate value, general business
and economic conditions (including but not limited to currency
rates and creditworthiness of customers); Company liquidity and
capital resources, including the availability of additional capital
resources to fund its activities; level of competition; changes in
laws and regulations; legal and regulatory proceedings; the ability
to adapt products and services to the changing market; the ability
to attract and retain key executives; and the ability to execute
strategic plans. Additional information about material factors that
could cause actual results to differ materially from expectations
and about material factors or assumptions applied in making
forward-looking statements may be found in the Company’s Annual
Information Form for the year ended September 30, 2017 and in the
Company’s most recent annual and interim Management’s Discussion
and Analysis under “Risk and Uncertainties” as well as in other
public disclosure documents filed with Canadian securities
regulatory authorities. The Company does not undertake any
obligation to update publicly or to revise any of the
forward-looking statements contained in this document, whether as a
result of new information, future events or otherwise, except as
required by law.
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