Rivian Automotive Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Regulation FD Disclosure
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Item 1.01 – Entry into a Material Definitive Agreement.
On January 16, 2025 (the “Effective Date”), Rivian New Horizon, LLC (the “Borrower”) and Rivian Automotive, Inc. (the “Sponsor” or the “Company”) entered into a Loan Arrangement and Reimbursement and Sponsor Support Agreement (the “LARSSA”) with the United States Department of Energy (“DOE”), pursuant to which DOE has agreed to arrange a multi-draw term loan facility, comprised of two tranches, with the first tranche consisting of an approximate 15-year term loan in an aggregate principal amount of up to $3,355,410,861.67 (the “Note A Loan”), and with a second tranche consisting of an approximate 10-year term loan in an aggregate principal amount of up to $2,620,230,354.14 (the “Note B Loan”, and together with the Note A Loan, the “DOE Loan”), to be provided by the Federal Financing Bank (“FFB”) to the Borrower under DOE’s Advanced Technology Vehicles Manufacturing Program (the “ATVM Program”). A copy of the LARSSA is filed as Exhibit 10.1 to this Current Report and is incorporated by reference herein. The description of the LARSSA set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the LARSSA.
The proceeds of advances under the DOE Loan will be used to support the development of an electric vehicle manufacturing facility in Stanton Springs North, near the City of Social Circle, Georgia, that will be built in two production capacity blocks (the first block, “Block 1”, the second block, “Block 2” and each, a “Block”, and together, the “Project”). The Borrower may request advances under the DOE Loan for purposes of funding certain eligible Project costs, subject to the Borrower’s satisfaction of the conditions precedent to advances under the Loan tranche that is designated for the relevant Block. Such conditions precedent include the Sponsor maintaining positive gross margin for certain periods prior to the first Note A Advance (as defined below), the Borrower achieving certain vehicle sales metrics prior to the first Note A Advance and first Note B Advance (as defined below), the making of required base equity contributions to fund certain Project costs, the granting to DOE of security over, inter alia, Project assets and the execution of related security documents, the Borrower’s entry into agreements necessary for the development, design, engineering, construction and operation of the Project, delivery of a Project execution plan and a bring-down of representations and warranties.
Advances under the DOE Loan tranche designated for Block 1 (each, a “Note A Advance”) may be requested, upon the satisfaction of certain conditions precedent, from January 16, 2025 through April 16, 2031, and the loans comprised of Note A Advances will mature on March 15, 2045 (the “Note A Maturity Date”). The principal amount of the Note A Advances will be payable in quarterly installments commencing on March 15, 2031, through the Note A Maturity Date. Interest payments on the Note A Advances will begin on June 15, 2030, and will be payable quarterly in arrears. Advances under the DOE Loan tranche designated for Block 2 (each, a “Note B Advance”) may be requested, upon the satisfaction of certain conditions precedent, from January 16, 2025 through May 15, 2032, and the loans comprised of Note B Advances will mature on June 15, 2041 (the “Note B Maturity Date”). The principal amount of the Note B Advances will be payable in quarterly installments commencing on June 15, 2032, through the Note B Maturity Date. Interest payments on the Note B Advances will begin on June 15, 2032, and will be payable quarterly in arrears. The interest rate associated with an ATVM Program loan is equal to the United States Treasury-equivalent yield curve with 0% credit spread, set at each advance.
The Sponsor and certain of its material domestic subsidiaries, whether currently existing or to be established or acquired in the future (the “Subsidiary Guarantors” and together with the Sponsor, the “Guarantors”), will jointly and severally guarantee the Borrower’s obligation to pay the unpaid principal of and interest (including capitalized interest) on Note A Advances and Note B Advances and all other obligations and liabilities of the Borrower to DOE, FFB, any of their relevant agents or any subsequent holder or holders of the promissory notes issued by the Borrower in favor of FFB, which may arise in connection with the LARSSA or any related loan or security document (collectively, the “Financing Documents”). To the extent any Guarantor has made any payment pursuant to such guarantee, such Guarantor will be subordinated to all rights that DOE and the other secured parties have under the Financing Documents in respect thereof, until all of such obligations under the Financing Documents have been fully and finally satisfied.
The Sponsor shall make (or cause to be made) contingent equity contributions to the Borrower, upon the Borrower’s demand therefor, to be applied to cost overruns incurred in connection with the applicable Block, up to a cap (the “Contingent Equity Cap”). The Sponsor’s obligation to make such contingent equity contributions will automatically terminate with respect to each Block upon the earlier of (i) the project completion date for such Block and (ii) the date on which the contingent equity contributions made by the Sponsor to the Borrower equal the Contingent Equity Cap in respect of such Block. The Sponsor also shall make (or cause to be made) equity contributions to the Borrower in the amounts needed to pay for certain Block-specific project costs required to achieve project completion for such Block, to the extent that sufficient funds are not available therefor in the relevant Project accounts and/or DOE Loan commitments available to be drawn for such Block. Until repayment of all borrowings under the DOE Loan, indebtedness and obligations of the Borrower to the Sponsor (and Rivian Automotive, LLC upon its entry into the LARSSA as the “Direct Shareholder” thereunder), unless expressly carved out, will be subordinated to borrowings under the DOE Loan and be payable solely in accordance with the restricted payment covenant in the LARSSA.
The LARSSA contains representations and warranties, as well as information, affirmative and negative covenants that apply to the Borrower (and in certain cases, the Guarantors) and include, among others, requirements with respect to the construction and operation of the Project, compliance with all requirements of the ATVM Program, and limitations on the ability to incur indebtedness, incur liens, make investments or loans, enter into mergers or acquisitions, dispose of assets (including intellectual property with respect to the Project), pay dividends or make distributions on capital stock, prepay indebtedness, pay management, advisory or similar fees to affiliates, enter into certain material agreements and affiliate transactions, enter into new lines of business or enter into certain restrictive agreements. Certain covenants apply to the Borrower (and in certain cases, the Guarantors) starting on the date that the LARSSA is signed, while other covenants, including certain of the negative covenants, do not apply to the Borrower or the Guarantors (if applicable) until the date of the first Note A Advance. The LARSSA also contains customary events of default, as well as customary notice periods and remedies with respect to the occurrence of an event of default.
Item 2.03 – Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 7.01 – Regulation FD Disclosure.
On January 16, 2025, the Company issued a press release and shareholder letter (the “Letter”) announcing the entry into the LARSSA. Copies of the press release and the Letter are attached as Exhibit 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
The information furnished pursuant to Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as expressly set forth by specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the possible issuance and timing of advances under the DOE Loan, the terms of the LARSSA and related Financing Documents, the use of proceeds resulting from the DOE Loan, the
satisfaction of covenants made pursuant to the DOE Loan, the absence of events of default, construction and operation of the Project, and the expected impact of the DOE Loan. You can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements use these words or expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part II, Item 1A, “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and its other filings with the Securities and Exchange Commission. The forward-looking statements in this Current Report on Form 8-K are based upon information available to us as of the date of this Current Report on Form 8-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.
Item 9.01 - Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit No. |
Description | |
| 10.1†^ | Loan Arrangement and Reimbursement and Sponsor Support Agreement, effective as of January 16, 2025, by and among Rivian New Horizon, LLC, Rivian Automotive, Inc. and the United States Department of Energy. | |
| 99.1 | Press Release, dated January 16, 2025. | |
| 99.2 | Shareholder Letter, dated January 16, 2025. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
| † | Portions of this exhibit (indicated by asterisks) have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv). |
| ^ | Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant undertakes to provide copies of any of the omitted exhibits upon request by the Securities and Exchange Commission. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RIVIAN AUTOMOTIVE, INC. | ||||||
| Date: January 16, 2025 | By: | /s/ Claire McDonough | ||||
| Name: | Claire McDonough | |||||
| Title: | Chief Financial Officer | |||||