Electric vehicle (EV) startup Arrival SA ARVL said on Monday that its proposed merger with special purpose acquisition company Kensington Capital Acquisition Corp V has been terminated.
What Happened: The company now intends to pursue alternate funding, it added. The company has engaged TD Cowen and Teneo Financial Advisory for this purpose.
Arrival announced it would merge with the blank-check firm early in April. The merger would have allowed Arrival access to up to $283 million of cash to build the expected North Carolina factory for the development of the company's XL van.
Back in November, Arrival warned that it had only $330 million in cash and equivalents as of September 30. It will not be sufficient to cover twelve months of operations, the company had said.
In May, Arrival reported that it ended the first quarter with $130 million in cash as of March 31.
Why It Matters: Last week, another EV maker Lordstown Motors Corp filed for bankruptcy protection following a drawn-out dispute with Foxconn over a $170 million investment. Lordstown received a notice from Foxconn on April 21 seeking to withdraw from the investment agreement citing a breach of conditions, following which the companies engaged in discussions for a resolution.
Foxconn failed to live up to its financial commitments, thereby damaging the company and its future prospects, the EV maker said. It also commenced litigation against Foxconn in the U.S. Bankruptcy Court for the District of Delaware.
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