Arrival Announces a $50M Equity Capital Commitment and Exchanges $121.9M of Debt for Equity
Annie Wechter
21 Feb 2023
Luxembourg, February 21, 2023 - Arrival (NASDAQ: ARVL) (“Arrival” or “the “Company”) today 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 (‘Antara’) and will exchange $121.9 million principal amount of 3.50% convertible notes due 2026 (‘Notes’) held by Antara for additional equity (the “Transaction’), thereby significantly reducing the Company’s debt and improving the Company’s liquidity position.Under the terms of the transaction agreements, Arrival will issue 125 million shares of new equity in exchange for $25 million of cash (‘Initial Cash Shares’). 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 (‘Subsequent Cash Shares,” together with Initial Cash Shares, “Cash Shares’). The closing price for Arrival shares on February 17, 2023 was $0.33. The additional $50 million of capital will support the ongoing development of Arrival’s products. In addition, Antara has agreed to convert $121.9 million (Face Value) of Notes into 219,420,000 ordinary shares (‘Exchange Shares’). 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.As part of the transaction agreements, Antara has committed to hold 100 million of newly issued shares for a period of 12 months (the “Lock-Up Shares”) 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.John Wozniak, CFO of Arrival, commented:
“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.
About Arrival
Arrival’s mission is to master a radically more efficient New Method to design, produce, sell and service outstanding electric vehicles, to support a world where cities are free from fossil fuel vehicles. Arrival’s in-house technologies enable a unique approach to assembling vehicles using rapidly-scalable, local Microfactories. Arrival (NASDAQ: ARVL) is a joint stock company governed by Luxembourg law.Forward-looking statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding the Transaction, the use of funds from the Transaction and Arrival’s debt and liquidity position. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on management’s belief or interpretation of information currently available. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release.IMPORTANT INFORMATION
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor does it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.The Cash Shares will be issued pursuant to an effective registration statement (File No. 333-266472) filed on Form F-3 with the US Securities and Exchange Commission (the “SEC”). Any investment decision to purchase the Cash Shares should be made solely on the basis of the information contained in the prospectus dated August 10, 2022, as supplemented by the prospectus supplement, dated February 21, 2023, filed with the SEC. You can obtain these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Copies of the prospectus and the prospectus supplement can be obtained from Arrival at its registered address.The Exchange Shares have not been registered under the United States Securities Act of 1933 (the “Securities Act”) and will be issued in accordance with the exemption from registration under Section 3(a)(9) of the Securities Act.The Cash Shares and/or the Exchange Shares are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any persons in member states of the European Economic Area which apply Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (this Regulation together with any implementing measures in any member state, the “Prospectus Regulation”), unless they are qualified investors for the purposes of the Prospectus Regulation in such member state or in any other circumstances falling within Article 1(4) of the Prospectus Regulation, and no person in member states of the European Economic Area that is not a relevant person or qualified investor may act or rely on this document or any of its contents.
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