LUXEMBOURG – Arrival, the UK-based electric vehicle manufacturer, has announced it will raise up to $50 million of new equity capital through the sale of new common stock to Antara Capital Master Fund LP. The funds will be used to support the ongoing development of Arrival’s products, which includes electric vans and buses.
In addition to the new equity capital, Arrival will exchange $121.9 million principal amount of 3.50% convertible notes due 2026 held by Antara for additional equity, significantly reducing the company’s debt and improving the company’s liquidity position. After the exchange, the face amount of Arrival’s remaining principal of convertible notes outstanding will be $198.1 million, a reduction of 38 percent, and future annual cash interest expense will be lowered by approximately $4.2 million.
Under the terms of the transaction agreements, Arrival will issue 125 million shares of new equity in exchange for $25 million of cash. Antara has also committed to provide a further $25 million of additional capital to be invested from time to time after 15 May 2023 and no later than 30 June 2023 by subscribing for additional equity at a price no greater than $0.20/share.
As part of the transaction agreements, Antara has committed to hold 100 million of newly issued shares for a period of 12 months and has provided the company the right to repurchase the Lock-Up Shares within the same 12 month period at a price of $0.40 per share.
Commenting on the news, John Wozniak, CFO of Arrival said, “Today’s agreements are an important step in the fund-raising process to support Arrival’s business plan and are in the best interests of all of our stakeholders. It delivers $50 million of new capital and significantly strengthens our balance sheet by reducing debt by 38 percent. We are delighted by the confidence that Antara has demonstrated in the exciting technologies we have developed to unlock the significant potential in the EV market.”
The capital raise and debt exchange are subject to customary closing conditions.