Cyprus Mail
BusinessInternationalTech & Science

Rivian plans to sell $1.3 bln in bonds to shore up capital, shares fall


Rivian Automotive (RIVN.O) plans to sell bonds worth $1.3 billion, it said on Monday, as weakening demand and lofty costs tighten a cash crunch around electrical vehicle makers.

Shares in Rivian fell nearly 7 per cent in after-hours trading.

Initial investors will get an option to buy an additional $200 million of the bonds for settlement 13 days after the bonds are issued, Rivian said in a statement.

The capital from this offering will help facilitate the launch of Rivian’s smaller R2 vehicle family, a Rivian spokesperson told Reuters, adding that convertible debt was “optimal cost of capital versus selling equity at today’s levels.”

Irvine, California-based Rivian, which makes R1T electric pickup trucks and R1S SUVs, has said its cash balance will fund its operations through 2025. It reported cash and cash equivalents of $11.57 billion at the end of December, down from $13.27 billion a quarter earlier.

In an effort to cut costs, the company last month laid off 6 per cent of its workforce.

Late last year, it shelved plans to build delivery vans in Europe with Mercedes (MBGn.DE) and had earlier pushed back by a year to 2026 the planned launch of a smaller R2 vehicle family at the $5 billion plant it is building in Georgia.

Rivian, which has been losing money on every vehicle it builds, forecasts 2023 production well below analysts’ estimates as it grapples with lingering supply chain bottlenecks after narrowly missing its target last year.

Rivian said the bonds would be “green” ones, which typically offer companies the chance to raise debt more cheaply from investors who are willing to take lower returns in exchange for supporting green projects.

Rivian’s bond will mature in March 2029 and investors will have the option to convert the bonds into cash or shares in the EV maker.

The interest rate, initial conversion rate and other terms of the bonds will be decided at the pricing of the offering.

Follow the Cyprus Mail on Google News

Related Posts

Barclays shares slip after major backer Qatar cuts stake

Reuters News Service

E-basket legislation to be voted on this week

Elias Hazou

Ukraine aerospace sector’s push for Western tie-ups met with skepticism

Reuters News Service

Cyprus puts strong showing at major European startup festival

Kyriacos Nicolaou

Cyprus unemployed drop to 12,662 in November 2023

Kyriacos Nicolaou

Cyprus’ FinTech Transformation: Inside the Payments Journey of Praxis Tech

CM Guest Columnist