Mobility startup Arrival has successfully obtained a £40.3 million ($50 million) bridge loan from its existing investors, aimed at facilitating a “potential sale or strategic alternative transaction,” as disclosed in an official filing.
Accompanying this announcement, the company has released its financial results for the first half of the year, revealing a notable increase in losses. The reported loss for this period stands at £125.5 million ($155.7 million), a significant rise from £80.6 million ($100 million) during the same timeframe last year.
Breaking down the financial figures, Arrival discloses a loss of £73.9 million ($91.7 million) before accounting for taxes, amortization, depreciation, and interest. Additionally, capital expenditure has seen a substantial reduction, dropping from £160.3 million ($198.9 million) in H1 2022 to £3.3 million ($4.1 million) in H1 2023.
The official filing outlines the purpose of the bridge financing, stating, “The bridge financing, together with internally generated cash, is intended to strengthen liquidity for Arrival and its subsidiaries as they explore a sales and marketing process for all or substantially all of their assets or another strategic alternative transaction.”
Under the terms of the bridge loan, Arrival now has a 120-day window, expiring on March 12 next year, to secure a new buyer or explore alternative strategic options.
To improve its financial standing, the electric bus, van, and car manufacturer implemented cost-cutting measures earlier this year, reducing its workforce by half in January and achieving a monthly savings of approximately £3.7 million ($4.6 million).
It’s worth noting that prior attempts to salvage the company, including a planned merger with special purpose acquisition company Kensington Capital Acquisition Corp., were ultimately canceled. In May, Arrival faced a warning from the Nasdaq for failing to submit its annual report. As the company navigates these challenges, the bridge loan is seen as a crucial lifeline, providing both time and resources for Arrival to secure a viable path forward.
