Arrival Makes Waves with New Deal: Secured Bridge Financing Announced
- Arrival is in talks to form a strategic financial partnership.
- The ally of the partner in question will provide Arrival with bridge financing secured by them.
On August 22, 2023, Arrival (Nasdaq: ARVL), the creator of an inventive EV production methodology, entered into active dealings with a strategic financial partner concerning a likely transaction for which terms and structure are contingent upon due diligence finishes.
To ensure the completion of due diligence and arrangement of a potential deal, the strategic financial partner, through one of its affiliates, has put forth a term loan facility secured by certain operating subsidiaries’ primary assets. The company has used $5 million under the loan already. An additional $15 million may become available with Lenders’ consent or if Arrival receives an unconditional cash offer on customary "certain funds" basis from an independent third party to purchase Arrival group assets that will provide sufficient net cash proceeds to pay off all amounts owed under the facility.
The Arrival group is availing of this facility for a three-month duration, until November 20th, 2023 (the “Termination Date”). All funds from this agreement are intended to serve Cash Flow and working capital needs. Should the facility be cancelled, paid off ahead of time or otherwise accelerated, a 1.2x make-whole premium must be paid in full, with all outstanding loans and commitments being settled at the same time.
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Arrival (Nasdaq: ARVL) as merged with Kensington Capital Acquisition Corp. After the completion of the combination, its common stock became listed on Nasdaq with a "ARVL" ticker symbol. The company's new Class 4 (“XL”) Van is designed to bring a superior user experience and lower cost for commercial operators in the U.S. last-mile delivery sector. Additionally, Kensington as provided $283 million of cash held in trust that shall be put to use in the combined entity.
Arrival is looking to transform the Class 4 EV sector with its XL Van that is designed particularly to meet the profitable last-mile delivery market, which Arrival opines is inadequately served by major OEMs presently. The Company applies its own hardware components, robotics technologies, and lasting composite materials to generate cars that are tailored for the cities and regions they help serve. In early 2023, Arrival kept on creating certified L Vans at its Bicester factory in the UK.
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