Taiga Motors Corporation, an electric off-road vehicle manufacturer, announced that it has entered into a $15 million Secured Term Loan Agreement with Export Development Canada (EDC).
The loan will support the company’s continued growth towards producing approximately 1,000 vehicles in 2023.
The Term Loan bears interest on the drawn funds at the annual rate of the prevailing Canadian prime rate plus 5.00% and provides for multiple advances over a nine-month drawdown period, with the first draw being today on October 4, 2023. The Term Loan matures on February 10, 2028.
“EDC’s support is welcomed as Taiga expands deliveries of its award-winning electric personal watercrafts and snowmobiles to customers in Canada, United States and eventually across the globe. The Term Loan allows added flexibility for Taiga to better manage its working capital,” stated Sam Bruneau, CEO and Co-Founder of Taiga.
The Term Loan also contains limited affirmative and negative covenants (including certain financial covenants relating to current ratios and cashflows from operation) and events of default. The incurrence of indebtedness and granting of security under the Term Loan are specifically permitted under the terms of the convertible debentures issued by Taiga in March and April 2023.
Over the third quarter of 2023, Taiga made important progress on ramping up operations producing 365 Orca personal watercrafts, a 105% increase over Q2 production and bringing the total production in the first nine months of 2023 to 639 vehicles. Launched in August, the Orca Performance model has enabled the company to materially increase its production efficiency. Despite initial hurdles in part availability affecting the start of production, the company recently achieved an important milestone, producing more than 50 vehicles per week. With the upcoming production change-over to snowmobiles now in November, Taiga expects to produce approximately 1,000 vehicles in 2023.