Taiga bought by a foreign investor | A debacle of 20 million for Quebec

The manufacturer of snowmobiles and electric watercraft Taiga will have a second life by passing under foreign interests, it has been confirmed The Press. Insolvent, the young Quebec company should cause the investing arm of the Quebec state to lose nearly 20 million.

Entrepreneur Stewart Wilkinson, founder and main investor in Vita Power, will become the new owner of the Quebec manufacturer. His company specializes in the design and integration of electric powertrains for pleasure boats or commercial use.

“A shareholder loan will also be advanced by the purchaser to the restructured group after the closing of the proposed transaction in order to finance its working capital,” underlines a recent request presented to the Superior Court of Quebec that The Press was able to consult.

This suggests that Mr. Wilkinson intends to restart operations at Taiga, which operated a manufacturing plant in the Montreal borough of LaSalle when he turned to the Companies’ Creditors Arrangement Act (LACC), last July.

We do not know the extent of the money that will be reinjected into the insolvent company as well as the price paid by its potential buyer. When Taiga took shelter from its creditors, its market value was less than 10 million. All the company’s shareholders will lose their stake in this affair.

The details of the transaction will be presented to the Superior Court – which supervises the ongoing process – by the controller Deloitte, who is piloting the process to find a buyer.

Of interest

According to the application presented to the court, Deloitte had received five expressions of interest. Mr. Wilkinson’s proposal was accepted on September 25. For the moment, around twenty Taiga employees, including the company’s senior managers, should remain on board.

It was not possible to speak with Mr Wilkinson on Monday.

According to its LinkedIn page, Vita Power, founded in 2017, has fewer than 50 employees and is headquartered in Southampton, England. It is therefore a young company. Last July, Vita Power announced that it was joining forces with Envoy, a manufacturer of electric motors for boats.

The transaction on the table allows Export Development Canada (EDC), Taiga’s main secured creditor, to save the furniture. This federal export credit agency had lent 20 million to the company before providing it with interim financing of 4.4 million when it was insolvent. Its loans will be assumed by the buyer.

At Investissement Québec (IQ), you have to prepare to suffer losses. The financial arm of the Quebec state came to Taiga’s rescue in the spring of 2023 by offering it 18.3 million in the form of convertible debentures. “No distribution should be made or paid […] to unsecured creditors,” the motion points out.

Despite the turn of events, IQ’s senior director, media and government affairs, Isabelle Fontaine, stressed that Mr. Wilkinson’s proposal proved to be the most promising for a relaunch of the company.

“The investor is committed to maintaining Taiga’s current activities in Quebec and intends to strive to maximize synergies between Taiga’s powertrain technology and that of [son groupe]she wrote in an email.

Still in the red

Taiga, which has never been profitable since its founding in 2015, had debts of 93 million when it filed for bankruptcy.

After a promising start on the Toronto Stock Exchange, where the stock was trading at a little over $13, Taiga’s stock constantly lost weight as the young company experienced problems in particular increasing its production rate and find new sources of financing.

Considered one of the rising stars of electrification before its financial setbacks, Taiga chose to protect itself from its creditors on July 10, after having increased warnings about the uncertainty surrounding its future due to its inability to finance itself to replenish its coffers.

Production has been at a standstill since last April in the Taiga factories located in the Montreal district of LaSalle. It had more than 300 employees last fall. This means that there were some 280 layoffs in the months leading up to the collapse.