This month, Elio Motors had a whopper of a deadline deadline: have a manufacturing facility developed in Shreveport, Louisiana, that employs at least 1,500 people, or face a significant financial penalty. Yet with $376 million needed to begin production on its three-wheeled vehicle, even the company’s founder knew that was impossible.
According to recently filed Securities and Exchange Commission documents, Elio has managed to secure an extension to bring that dream to fruition, nonetheless.
The development is the latest missive in Elio’s quest to bring the futuristic namesake vehicle to life. According to KSLA-12 in Louisiana, since last October, Elio hasn’t paid their monthly tab to RACER Trust—which provided a $23 million loan to facilitate its move to a shuttered General Motors plant in town. From KSLA-12:
As a result, Elio currently owes more than $1.7 million in back payments to RACER Trust. While the default interest rate of 18% will continue to add up until payments resume, the company now has another year to pay back the principal on the loan.
Nonetheless, the RACER Trust says that the decision to grant Elio an extension is justified. In a statement, RACER says a possibility remains for “another prospect” to utilize the space in Shreveport, as there’s “contractual flexibility to relocate Elio Motors to another facility in Caddo Parish.
Having evaluated the relevant factors — the lack of interference with prospective economic redevelopment opportunities at the Shreveport plant; no economic risk to Caddo Parish; Elio Motors’ opportunity to make progress toward fulfilling its business goals and jobcreation pledge; and the LED’s letter of support — RACER Trust has made what it considers to be the responsible decision to extend the job-creation deadline.
The SEC document says if Elio receives $25 million in funding by the end of July, then Elio must pay back RACER its overdue bill—now totaled at $1.75 million—and on top of that, the default interest rate of 18 percent will begin to accrue starting in August. But now, Elio has an extra year to pay back the full loan.
So here’s the question: Who’s going to immediately float Elio $25 million?