What’s Happening: Arrival, a NASDAQ-listed electric vehicle (EV) manufacturer, has announced a $300 million equity financing line established with Westwood Capital. The company has also called for an Extraordinary General Meeting (EGM) of shareholders to vote on several resolutions, including a reverse stock split and capital reduction. Arrival CEO Igor Torgov commented on the developments, stating that the company has taken important steps to raise additional capital and focus on the key U.S. market.
Why It Matters: The funding announcement and EGM resolutions are part of Arrival’s efforts to address the significant EV market opportunity. The company has developed innovative technologies and know-how that position it strongly in the industry. The equity financing line and EGM resolutions will help Arrival take advantage of this opportunity by raising additional capital and focusing on its U.S. product strategy.
Key Points:
- Arrival has established a $300 million equity financing line with Westwood Capital, subject to certain conditions.
- The company has called for an EGM of shareholders to vote on several resolutions, including a reverse stock split and capital reduction.
- The EGM is planned for April 6, 2023, and shareholders holding shares of the company as of March 28, 2023, will be invited to vote on the resolutions.
- Arrival has taken decisive steps to significantly reduce its headcount and cash burn while sharpening its focus on its U.S. product strategy.
- The company is building ten vans in the Bicester microfactory to develop highly automated factory processes and integrate them with its autonomous mobile robots.
- Arrival is continuing to develop the XL Van designed specifically for the U.S. market, with start of production in Charlotte targeted for late 2024.
- Despite mitigating factors taken to date, there remain material uncertainties about the company’s ability to continue as a going concern primarily due to the fact that further capital raises are required to fund the company to a break-even point.
Bottom Line: Arrival’s $300 million equity financing line and EGM resolutions are important developments for the company as it seeks to capitalize on the significant EV market opportunity. The funding and resolutions will help Arrival focus on its U.S. product strategy and raise the necessary capital to continue operations and bring its vans into production in Charlotte in late 2024. However, there remain material uncertainties about the company’s ability to continue as a going concern, and it is exploring all funding and strategic opportunities to obtain the capital necessary to fund the vehicle program and bring the company to cash flow break-even.
