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Electric van maker Arrival lurches closer to insolvency

The British-based company which set out plans to become a global pioneer in electric vehicle manufacturing has taken a step closer to insolvency after lining up a new set of advisers to oversee contingency planning.

Sky News has learned that Arrival, which is listed on New York's Nasdaq stock exchange, is in discussions with EY, the professional services firm, about acting as administrator if it cannot secure rescue funding.

City sources said that a bid to secure long-term funding through a sale or capital injection which had been led by Jefferies looked unlikely to prevail.

They cautioned, however, that there remained a possibility that Arrival would secure enough money to survive.

It was unclear on Monday how long Arrival's remaining cash reserves would last.

The company's communications with stock market investors have been parsimonious, with an ongoing threat of delisting hanging over it owing to delays in filing financial statements and holding an annual meeting of shareholders.

Earlier this month, the company said it had received a further notice from Nasdaq warning that it was not in compliance with the listing rules.

Shares in Arrival have plummeted by more than 95% over the last year, leaving it with a market capitalisation of just over $20m.

Arrival went public in March 2021 through a combination with CIIG Merger Corp, a special purpose acquisition company (SPAC) set up by Peter Cuneo, the former Marvel chief executive.

On the day its shares began trading, it was valued at about $5.4bn (£4.2bn).

Arrival was one of a slew of electric vehicle companies that capitalised on a wave of investor demand during the last technology boom to raise money at multibillion-dollar valuations.

A number of them, including Volta Trucks, have since filed for insolvency, while others, such as Tevva Motors, have seen capital injections stall as investors have deserted the sector.

Sky News previously reported that Arrival needed at least $500m of additional funding to fund it through to break-even.

The company was backed by blue-chip global investors including BlackRock, which injected nearly $120m into the business in 2020.

Hyundai and Kia, the Korean carmakers, and the delivery service UPS were also early backers of the company.

It said it would cash in on demand for electric vehicles by targeting commercial customers rather than ordinary motorists.

In late 2021, it unveiled a prototype of a car designed to be used by ride-hailing companies such as Uber Technologies.

None of its vehicles have yet made it into commercial production, and it has been forced to slash hundreds of jobs, including many of its senior management team.

At one point it employed 2,800 people, according to a presentation seen by Sky News.

It has since faced a number of winding-up petitions tabled by stakeholders.

In a bid to secure new capital, it struck a second SPAC deal, with Kensington Capital Acquisition Corp V, which would have injected hundreds of millions of dollars more into the company.

The agreement between the two parties was terminated last July.

Arrival, which routinely does not respond to messages to a dedicated press email address, has been contacted for comment.