Electric vehicle (EV) public transit manufacturer Arrival (NASDAQ:ARVL) stock, is up more than 20% today following an “extraordinary general meeting of shareholders,” on April 6. A number of interesting resolutions were passed, including a share consolidation.
The company’s shareholders passed all of the board of directors’ proposed resolutions at its recent shareholder event. This means a number of major changes are heading the company’s way. Indeed, six major resolutions were approved, including the headlining merger agreement.
The first two approved resolutions describe a reduction in the company’s share capital, by $83,525,590. Arrival’s new share capital is $156,532. The company opted to allocate the reduced capital to a new free reserve. It’s worth noting no actual shares were canceled in the process.
Resolutions 3-5 refer to Arrival’s share consolidation. Shareholders approved a reverse stock split at a 1-for-50 consolidation ratio. This essentially means that a shareholder with 50 shares, now has just one share, with the same value.
The last major approved resolution solidifies a previous leadership change from last November. Indeed, the company replaced Frank Peter with Denis Sverdlov, as a class A director.
ARVL Stock Soars on Merger Agreement
Perhaps the most notable outcome of the recent shareholder meeting is the merger between Arrival and special purpose acquisition company (SPAC) Kensington Capital Acquisition V. In a press release last Thursday, Arrival announced that the companies will collaborate on a Class 4 van for release in the U.S.:
“‘This transaction offers a potentially significant capital infusion and additional support in bringing our XL Van to market,’ said Arrival CEO Igor Torgov. ‘We are looking forward to partnering with Kensington to meet our production goals as we aim to commercialize our XL Van by the end of 2024.'”
The new company will have an enterprise value of $524 million, though it will retain its “ARVL” Nasdaq ticker symbol and listing. The company is eying a late 2024 production timeline for its in-development XL vans, at its Charlotte, North Carolina factory.
Justin Mirro, Chairman and Chief Executive of Kensington also commented on Thursday’s merger:
“While there are many companies making electric vehicles today, Arrival has built a next-generation Class 4 van, taking advantage of 200 patents and over $1B in invested capital, that meets the needs of today’s drivers, fleet operators and delivery customers. Through our success with leading EV suppliers, we are confident that making the future cleaner is also good business. By combining Arrival’s vehicle and manufacturing technologies with our commercialization and public market experience, we can help them bring the XL Van to the U.S. market.”
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.