Image credit: Arrival
Electric vehicle maker Arrival has secured up to $50m (£41.4m) by issuing shares to Antara Capital Master Fund LP.
The firm has also issued $121.9m (£100.2m) in debt to Antara in return for 219.42 million shares in the company. Arrival says this move “significantly” reduces its debt position and helps liquidity.
“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,” said John Wozniak, CFO of Arrival.
Initially, Arrival will receive $25m for a further 125 million shares, with the remaining half “to be invested from time to time” by Antara between 15 May 2023 and 30 June 2023 at a price of no more than $0.20 per share.
Arrival will use the capital boost from Antara for the development of its electric van and bus.
Wozniak added: “It delivers $50m of new capital and significantly strengthens our balance sheet by reducing debt by 38%.”
Oxford-based Arrival however will still have $198.1m (£164m) in convertible notes outstanding on its balance sheet.
New York-based Antara will hold 100 million in lock-up shares for one year, which Arrival can choose to buy back at a predetermined price of $0.40 per share.
It comes at a time when the firm is looking to reduce costs. Last month the startup cut half of its global workforce as part of a “restructuring” effort.
Arrival said that by decreasing employee, real estate and third-party spending costs it would save £24.2m each quarter.
This overhaul also saw Igor Torgov appointed as CEO, with founder Denis Sverdlov stepping down from the role in November last year.
Production of its electric van in 2024 from its Charlotte, US factory now appears set to go ahead as the company previously said that it was “subject to raising additional capital”.
The vans were originally billed to be rolling off the line from its Bicester microfactory in Q4 last year.