Israeli AutoTech REE Avoids Bankruptcy with Debt Restructuring Deal
Translated & summarized from Globes by baba
The Tel Aviv District Court approved a debt settlement for auto-tech company REE, which owed 51 million shekels, allowing it to continue operations. The deal involves new investments totaling $4 million from Kukac LLC and Ellj Limited and debt-to-equity conversions. REE's stock was delisted from Nasdaq, and its workforce has shrunk significantly since going public five years ago.
The story in 5 lines · by baba
- Auto-tech firm REE secured court approval for a debt settlement, avoiding liquidation.
- The company owed 51 million shekels and will receive $4 million in new investment.
- REE's stock was delisted from Nasdaq, and its workforce has drastically reduced.
- The settlement aims to keep the company operational and provide partial debt repayment.
- Investors and company executives will convert debt into company shares.
The Tel Aviv District Court approved a debt settlement for the auto-tech company REE, which had accumulated debts totaling 51 million shekels. The company will continue its operations under the terms of the agreement, which includes a new investment of $2 million each from Kukac LLC and Ellj Limited to provide working capital.
REE became a public company five years ago through a SPAC merger, valued at $3.1 billion. However, its stock was recently delisted from Nasdaq and moved to over-the-counter trading in the U.S. due to non-compliance with listing requirements. Following several rounds of layoffs, the company now employs 31 people in Israel, a significant decrease from the 270 employees it had when it first went public.
In 2025, REE reported revenues of only $1.3 million and a loss of $55.8 million. Since its founding in 2011, the company has spent over $1 billion. Judge Hagai Brenner stated that the settlement aims to keep the company operational and prevent asset liquidation, which would result in value destruction, job losses, and minimal returns for creditors.
Under the settlement, investors will convert 20 million shekels of debt into company shares. The CEO, Daniel Barell, and VP, Achishy Sardes, will also convert millions of shekels in loans they provided to the company into shares, increasing the payout to creditors. Additional funds for debt repayment will come from the company's available cash and expected proceeds from its ongoing operations, including up to $3 million from a defense project.
The tax authorities and employees are expected to receive their owed debts. Suppliers are anticipated to recover approximately 21% of their debt, with a provision for an additional $3 million contingent on a future exit. The settlement plan is supported by CPA Yaakov Passi, who deemed it significantly preferable to liquidation. The settlement manager is attorney Uri Gaon, represented by attorney Shai Levon Gilad, while REE is represented by attorneys Yariv Dinovitz and Neri Lavie.