Israeli Car Maker REE Automotive Seeks Debt Arrangement Amid 51 Million Shekel Liabilities
REE Automotive, an Israeli vehicle manufacturer, has accumulated debts totaling approximately 51 million shekels and has filed for a debt arrangement process at the Tel Aviv District Court. The company requested a stay of proceedings, appointment of a settlement trustee, and convening of creditor meetings to facilitate its financial recovery and preserve its assets. REE aims to maintain its operations as a going concern while negotiating a debt restructuring plan with stakeholders.
Founded in 2011 as SoftWheel, initially specializing in powered wheelchairs with motors integrated into the wheels, the company rebranded as REE in 2019. It developed a unique technology that electronically controls steering, braking, and propulsion without mechanical linkages, attracting significant investments from global automotive industry players. However, in May 2023, REE reported a $70 million loss and issued a going concern warning, citing global automotive industry disruptions, particularly due to U.S. tariff policies, which forced it to halt production plans.
The company stated that its self-manufacturing model proved costly, leading to a strategic shift to reduce expenses and continue operations. REE was publicly traded on NASDAQ starting in 2021 but was recently delisted. Earlier this year, it informed NASDAQ of efforts to optimize operations and explore strategic alternatives, including a potential sale. The ongoing security situation in Israel since October 2023, including the "Sword of Iron" conflict and tensions with Iran, has further hindered REE's business activities and capital raising efforts.
REE describes itself as a technology-driven firm with valuable intellectual property, international reputation, and skilled personnel. It argues that reorganization is preferable to liquidation, which would result in job losses and asset destruction. The company’s liabilities include about 12 million shekels owed to employees and 39 million shekels to general creditors. REE currently employs around 31 people, with Daniel Barel as CEO and Ahishi Sardas as VP of Development. The company has requested that attorney Amit Pins be appointed as the settlement trustee to oversee the restructuring process.
