British EV startup Arrival inches closer to insolvency
Technology
British EV startup Arrival inches closer to insolvency
(Reuters) - British electric vehicle company Arrival is heading closer to insolvency after lining up a new set of advisers to oversee contingency planning, Sky News reported on Monday.
The company is in talks with accounting firm EY about acting as administrator if it cannot secure rescue funding, the report, added.
Arrival did not immediately respond to Reuters requests for comment, while EY declined to comment on the report.
EV firms that went public in the SPAC boom during the pandemic capitalized on strong demand from investors looking for the next Tesla (TSLA.O).
However, high-interest rates, inflation, supply chain issues, and production struggles have sapped their cash balances with few or no vehicles on the roads. In the past year, many EV startups including Lordstown Motors, Proterra, and Sweden's Volta Trucks have declared bankruptcy as access to capital tightens.
Shares of Arrival, which was earlier backed by Hyundai (005380.KS), Kia (000270.KS), and United Parcel Service (UPS.N), slumped 15% after the report.
Earlier this month, Arrival said it had missed a Dec. 1 deadline to make an interest payment on its convertible debt due 2026 as it battles a cash crunch.
It also received a notice of delisting from Nasdaq for not complying with listing rules due to a delay in filing its interim financial statements and failure to hold an annual shareholder meeting.
Late last year, the company said it intended to sell itself or consider other strategic options, after slashing its global workforce by about 25%.
To boost cash balances, Arrival struck a deal with blank-check firm Kensington Capital Acquisition Corp V. It would have brought in hundreds of millions of dollars had the deal not collapsed. The EV company did not specify a reason for the agreement falling through.
