- Financial Struggles and Contingency Plans: Electric Vehicle Company Arrival Prepares for Potential Insolvency
- Challenges in the Electric Vehicle Industry: Arrival Seeks Alternative Funding to Avoid Bankruptcy
- Past Success and Current Struggles: Arrival’s Stock Decline and Attempted Fundraising Efforts
The New York-listed company has hired Alvarez & Marsal to create contingency plans for an insolvency filing if it is unable to secure new funding.
A British company that promised to pioneer electric vehicle manufacture is working with consultants to prepare for insolvency.
Arrival, a Nasdaq-listed firm, has recruited Alvarez & Marsal (A&M) to help it save its future.
According to city sources, A&M has been hired to advise Arrival’s board on a variety of restructuring options. Including administration contingency planning.
According to informants in the automobile industry, the company has been on the verge of bankruptcy for weeks.
If Arrival can find alternative funding, a lifeline is still a possibility.
At least one fund is believed to have approached the company in recent weeks with a proposal for a capital injection; however, it was unclear over the weekend whether any proposal could be implemented before Arrival runs out of cash.
Arrival was one of several electric vehicle companies that raised money at multibillion-dollar valuations during the last technology bubble by capitalizing on investor demand.
The London-based company went public in March 2021 via a merger with CIIG Merger Corp, a special purpose acquisition company (SPAC) established by Peter Cuneo, the former CEO of Marvel.
On the day its shares began trading, its value was approximately $5.4 billion (£4.2 billion).
In 2020, BlackRock invested nearly $120 million in Arrival, a company that was supported by prominent global investors.
Hyundai and Kia, Korean automobile manufacturers, and UPS were also early investors in the company.
It stated that it would capitalize on the demand for electric vehicles by targeting businesses rather than private motorists.
Late in 2021, it unveiled a prototype of a vehicle intended for use by ride-hailing services like Uber Technologies.
None of its vehicles have yet reached commercial production, and the company has been compelled to eliminate hundreds of positions, including a significant portion of its senior management team.
Since its initial public offering, Arrival has endured adversity.
Its stock has plunged 95% since its IPO, and its market valuation was little over $30 million on Friday.
In recent months, it has attempted to secure new funding through a variety of hedge fund agreements.
Arrival also entered into a second SPAC transaction with Kensington Capital Acquisition Corp V, which would have added hundreds of millions of dollars to the company’s coffers.
Last month, the two parties terminated their agreement.
Arrival did not respond to multiple queries for comment via email, while A&M declined to comment.
