Struggling EV Company Secures $50 Million Bridge Loan to Stay Afloat
In a last-ditch effort to stay afloat, Arrival, the electric vehicle (EV) startup that went public via a merger with a blank check company, has secured a $50 million bridge loan. The funds will keep the company alive for another 120 days while it explores a potential sale or other "strategic alternative transaction." This marks yet another attempt by Arrival to find a way out of its financial struggles.
The Bridge Financing Agreement
According to a regulatory filing posted on Wednesday, Arrival has secured the bridge financing from Antara Capital and Highbridge Capital Management. The $50 million loan will be used in conjunction with the company’s remaining cash on hand to explore a sale or other strategic transaction.
"The bridge financing will provide us with additional liquidity to continue our efforts to identify a buyer or other strategic alternative transaction," Arrival said in its filing. "We believe that this financing will enable us to maintain operations and pursue these opportunities while we work towards resolving our financial situation."
Arrival’s Struggles Continue
The $50 million bridge loan is just the latest attempt by Arrival to stay afloat. In the past 15 months, the company has laid off workers four times, slashed production targets, and dropped its Uber car and bus programs. It has also failed to meet Securities and Exchange Commission (SEC) filing requirements, missing another deadline to file its 2022 annual report.
In March 2023, Arrival secured a $300 million lifeline to help it stay in business through the end of 2023 as it sought additional dedicated funds to develop its XL delivery vans for the U.S. market and start production in Charlotte, North Carolina by 2024. The company also took other measures such as a reverse stock split to help regain compliance with the Nasdaq.
Financial Struggles
Arrival reported that it ended the first half of 2023 with approximately $43 million of cash and cash equivalents. This is down from the $100 million in the same period last year. The company also reported a net loss of $155.7 million in the first half of 2023, compared to a loss of $100 million in the same period in 2022.
Arrival has tried to reduce costs through restructuring efforts that involved laying off the bulk of its employees. It also reduced capital expenditures to $4.1 million in the first half of 2023, compared to $198.9 million in the first half of 2022.
The Road Ahead
With the bridge financing in place, Arrival will have a tight window to find a buyer or other strategic transaction. The company’s executives are likely under pressure to secure a deal quickly, given the lack of success with previous funding efforts and restructuring plans.
As the clock ticks down on the 120-day loan term, it remains to be seen whether Arrival can successfully navigate its financial struggles and emerge as a viable entity in the EV market.
About the Author
Kirsten Korosec is a reporter and editor who has covered the future of transportation from EVs and autonomous vehicles to urban air mobility and in-car tech for more than a decade. She is currently the transportation editor at TechCrunch and co-host of TechCrunch’s Equity podcast. She is also co-founder and co-host of the podcast, ‘The Autonocast.’
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This article has been updated with additional information from a regulatory filing by Arrival.
