UK-based electric vehicle manufacturer Arrival has secured up to $50m of new equity capital through the sale of new common stock to Antara Capital Master Fund LP, marking an important milestone in the company’s fundraising process. The funds will be used to support the development of Arrival’s electric vans and buses.
As part of the agreement, Arrival will exchange $121.9m of 3.50% convertible notes due in 2026 held by Antara for additional equity. This will significantly reduce the companyās debt and improve its liquidity position. The face amount of Arrival’s remaining principal of convertible notes outstanding will be reduced by 38% to $198.1m, and future annual cash interest expense will be lowered by approximately $4.2m.
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Under the terms of the agreement, Arrival will issue 125 million shares of new equity in exchange for $25m of cash. Antara has also committed to providing an additional $25m of 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 holding 100 million of newly issued shares for a period of 12 months and has provided the company with the right to repurchase the Lock-Up Shares within the same 12-month period at a price of $0.40 per share.
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Arrival’s CFO, John Wozniak, said the agreements are an important step in the fundraising process to support the company’s business plan and are in the best interests of all stakeholders. He added that the agreements deliver $50m of new capital and significantly strengthen Arrival’s balance sheet by reducing debt by 38%. The capital raise and debt exchange are subject to customary closing conditions.
The new equity capital and reduction in debt will help Arrival to continue developing its innovative technologies and unlock the significant potential in the electric vehicle market. The move also demonstrates the confidence that Antara has in Arrival’s exciting technologies.
