$300M Equity Financing Line with Westwood Capital Provides Additional Liquidity
Extraordinary General Meeting of Shareholders to Approve Reverse Stock Split
LUXEMBOURG, March 13, 2023 (GLOBE NEWSWIRE) — Arrival (NASDAQ: ARVL; the “Company”) is today announcing a $300 million equity financing line established with Westwood Capital. At the same time, the Company is also announcing the convening of an Extraordinary General Meeting of shareholders to vote on a number of resolutions, including a reverse stock split and capital reduction. Additional details of these announcements will be provided on the Company’s Business Update Webcast scheduled today, March 13, 2023 at 4:30 P.M. Eastern Time.
“I have come into the business as CEO at a critical time. Arrival has developed innovative technologies and know-how which position us strongly to address the considerable EV market opportunity. We have now taken important steps to help us take advantage of this opportunity, including raising additional capital as well as placing a sharper focus on the key U.S. market and driving significant efficiency improvements.
Looking forward, we will continue developing and validating our vehicles this year. We are also progressing with encouraging conversations with potential partners and investors to effect the next stage of the business plan – bringing Vans into production in Charlotte in late 2024,” commented Igor Torgov, CEO.
Business Updates
Over the last few months the Company has taken decisive steps to significantly reduce its headcount and cash burn. At the same time, it has sharpened its focus on its U.S. product strategy, which will prioritize commencing production of a purpose-built Class 4 XL Delivery Van in the Charlotte factory in late 2024, pending a capital injection this year to fund the program. Recently, the Company was successful in driving organizational efficiencies that will extend the run-rate of existing cash resources into late 2023; it succeeded in arranging up to $350 million of new capital commitments and an agreement to reduce net debt by $121.9 million. Following these actions, the key elements of the business plan are as follows:
- Lowering the Company’s current, targeted cash spend to no more than $35 million/quarter which significantly reduces the size of investment required to fund the business this year.
- Finalizing a 50% reduction of the Company’s global workforce in Q1 that will result in less than 800 employees by the end of March 2023.
- Building 10 Vans in the Bicester microfactory to further develop the highly automated factory processes and integrate them with the company’s autonomous mobile robots. These vans will also be used to accumulate 250,000 kms of public road mileage to validate Arrival’s engineering designs and components by the end of 2023.
- Continued development of the XL Van designed specifically for the U.S. market. This product attracts higher average selling prices, margins and tax credits than the L Van, and will require a dedicated capital raise to fund production in the Charlotte factory. Start of production in Charlotte is targeted for late 2024.
Igor Torgov, previously an Arrival executive, has been appointed as CEO to lead the execution of the newly approved plan, with his intimate knowledge of Arrival’s business priorities, technologies and talent.
Equity Financing Line
The Company has established a $300 million equity financing line with Westwood Capital, providing the Company with access to additional liquidity, subject to certain conditions. For further information regarding the equity financing line, please see the Company’s report on Form 6-K filed with the U.S. Securities and Exchange Commission via its EDGAR system today, March 13, 2023. The report is available on the SEC’s website at http://www.sec.gov. The information contained in this website is not incorporated by reference in, or in any way a part of, this press release.
Outlook
- The XL Delivery Van funding activities are specific to driving the start of production in Charlotte next year. There is no planned Capex spend related to this program until dedicated capital is raised.
- Arrival will achieve its target quarterly $35 million burn rate by the second half of 2023.
- With available capital resources and additional initiatives to reduce working capital, the Company expects to have sufficient liquidity to fund the business into late 2023 without the investments required for XL production.
