Shared micromobility operator Bird has announced that it has secured commitments from Apollo Investment Corporation to increase its existing vehicle finance credit facility from $ 40 million to $ 150 million. The size increase will take effect once the PSPC deal with Switchback II Corporation is formally concluded.
The shareholder vote to approve and confirm the business combination is scheduled for November 2. The announcement, which comes just weeks before Bird becomes a publicly traded company, could potentially be a move by the company to instill investor confidence before the bell rings.
Bird’s chief financial officer, Yibo Ling, said the increase in Bird’s credit facility with Apollo is a result of the “strong cash-generating capabilities” of its fleet of electric scooters and bikes. (Disclaimer: Apollo has acquired Verizon Media Group, owner of TechCrunch. The company is now called Yahoo Inc.)
“With the increased liquidity provided by the expanded facility, we believe we are well positioned to support our expansion plans,” Ling said in a statement.
The news comes just a day after Bird announced that it would manufacture “tens or hundreds of thousands” of vehicles equipped with its new location-based sidewalk detection technology over the next year, the type of scale that would require a significant initial capital investment. . Bird says Apollo will fund the vast majority of vehicle purchases, allowing Bird to initially pay a small amount to the finance solutions company, with plans to pay off the full amount over about nine months as it generates revenue.
Sources familiar with the terms of the credit facility say vehicle financing, regardless of size, already helps Bird be more capital efficient, giving it access to deep pockets in the winter, when Bird usually buys vehicles. , and time to generate income in the spring and summer months. The terms of repayment of the credit facility are still the same as when Apollo initially committed $ 40 million, according to Bird’s filing with the SEC. Since Apollo’s collateral is made up of the vehicles themselves and the money from the vehicles, Bird can only repay its debt from the revenue generated by the vehicles. .
While the height increase is new, it’s not surprising. Bird had previously stated a goal of expanding its vehicle finance capabilities to fund the majority of vehicle CapEx in 2022 and beyond when it presented its investor deck in May, so the increase in Apollo appears to be. be consistent with these objectives.