GreenPower Motor Company Inc. announced that it intends to enter into a new credit facility for $2 million.
BMO Bank of Montreal is providing GreenPower with a revolving operating demand loan for US $2,000,000, which bears interest at the US bank rate plus 1.5% and is secured by the assets of GreenPower. The revolving operating loan will primarily be used to finance production costs for GreenPower’s all-electric buses as well as ongoing working capital requirements.
“We are excited to be working with BMO Bank of Montreal as GreenPower enters a new phase of production and expansion,” said Fraser Atkinson, Chairman of GreenPower. “This new facility will significantly reduce pressure on our ongoing working capital requirements and will allow us to focus on growth with cost-effective and flexible financial terms.”
Two directors of the Company, David Richardson and Fraser Atkinson, have agreed to provide joint and several personal guarantees each in the amount of CDN $2,525,000 in support of the revolving operating demand loan. In consideration for providing the personal guarantees, GreenPower has agreed to issue an aggregate of 4,400,000 non-transferrable common share purchase warrants (the “Warrants”) to David Richardson and Fraser Atkinson. Each Warrant will be exercisable into one common share of the Company for a period of three years at an exercise price of CDN $0.65 per share. The issuance of the Warrants is subject to approval of the TSX Venture Exchange.
Since each of Fraser Atkinson and David Richardson are directors of the Company, the issuance of the Warrants will constitute a “related party transaction” as defined under Multilateral Instrument 61-101 (“MI 61-101”). The issuance of the Warrants will be exempt from the need to obtain minority shareholder and formal valuation as required by MI 61-101 as the Company is listed on the TSX Venture Exchange and the fair market value of the Warrants being issued to insiders or the consideration paid by insiders of the Company did not exceed 25% of the Company’s market capitalization.