SAN FRANCISCO - Rivian Automotive plans to sell bonds worth $1.3 billion, it said on Monday, as weakening demand and lofty costs tighten a cash crunch around electric vehicle makers.
Rivian shares fell nearly 7 percent 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 crossovers, 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, th…