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By Abhirup Roy
SAN FRANCISCO (Reuters) - Rivian's earlier-than-expected bond issuance this month was meant to strengthen the EV maker's balance sheet before geopolitical risks tighten capital markets and does not reflect any concerns around its cash and operations, its CEO told Reuters on Tuesday.
After a $1.3 billion convertible green bond in March, Rivian had said it had enough money to last it through 2025 and it would not need to raise capital until then.
But the maker of R1S sport utility vehicles and R1T pick up trucks announced plans to issue $1.5 billion worth of convertible green bonds this month, sparking concerns about the company's financial health and sending shares plummeting.
Seeking to allay those concerns, Rivian CEO RJ Scaringe told Reuters the capital raise was meant to create an additional buffer as it was kicking off meaningful investments to build the R2 and to make sure "that we are never at risk of having a overly constrained or overly tight balance sheet."
"We don't control the macro economic environment, we cannot control political conflict, and those are real risks that exist not just specific to Rivian," Scaringe said in an interview. "That's a risk to our capital markets and the liquidity of those capital markets."
"I would not say this is any reflection of the degree of confidence we have for R2 both in terms of execution and in terms of our cost structure," he said.
(Reporting by Abhirup Roy in San Francisco; editing by Jonathan Oatis and David Gregorio)
