Arrival Announces a $50M Equity Capital Commitment and Exchanges $121.9M of Debt for Equity

Arrival (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.