Arrival, Electric Vehicle Manufacturer, Prepares for Possible Insolvency
Arrival, a British-based company that aimed to be a global pioneer in electric vehicle manufacturing, is reportedly working with advisors to prepare for potential insolvency. The company, listed on the Nasdaq stock exchange in New York, has enlisted the help of Alvarez & Marsal (A&M) to provide guidance as it seeks to salvage its future. City sources have revealed that A&M has been appointed to advise Arrival’s board on various restructuring options, including contingency planning for administration.
According to industry insiders, Arrival has been on the brink of bankruptcy for several weeks. However, there is still a possibility of a lifeline if the company can secure alternative financing. Reports suggest that at least one fund has approached Arrival with a proposal for a capital injection. It remains uncertain whether any such proposal can be executed before Arrival runs out of cash.
Arrival was one of many electric vehicle companies that took advantage of investor demand during the previous technology boom, raising significant funds at multibillion-dollar valuations. The London-based company went public in March 2021 through a merger with CIIG Merger Corp, a special purpose acquisition company (SPAC) established by former Marvel CEO Peter Cuneo. At the time of its stock market debut, Arrival was valued at approximately $5.4 billion (£4.2 billion).
Arrival garnered support from prominent global investors, including BlackRock, which injected nearly $120 million into the business in 2020. Other early backers included Hyundai, Kia, and UPS. The company aimed to capitalize on the growing demand for electric vehicles by targeting commercial customers rather than individual motorists. In late 2021, Arrival unveiled a prototype of a car designed for ride-hailing companies like Uber Technologies. However, none of Arrival’s vehicles have entered commercial production, and the company has been forced to make significant job cuts, including within its senior management team.
Since its initial public offering, Arrival has faced significant challenges. Its stock has plummeted by over 95%, and as of Friday’s close, its market capitalization stood at just over $30 million. In recent months, Arrival has attempted to secure new funding through agreements with hedge funds. The company also entered into a second SPAC deal with Kensington Capital Acquisition Corp V, which would have injected hundreds of millions of dollars into Arrival. However, this agreement was terminated last month.
Arrival has not responded to requests for comment, while A&M declined to provide a statement.
Source: 4Press.biz
