Business
Tel Aviv court clears debt deal for REE Automotive, once valued at $3.1bn
By Jewish Life Staff, . Jewish Life.
A Tel Aviv district court approved a debt settlement Wednesday for REE Automotive, an Israeli developer of software-defined vehicle technology, clearing a path for the company to keep operating despite debts of NIS 51 million (roughly $14 million at current rates). Globes reported the decision, which was also disclosed in a filing with the U.S. Securities and Exchange Commission.
What the deal involves
Two outside investors, Kukac LLC and Elljay Limited, will each put in $2 million to give the company working capital. They will also convert NIS 20 million of existing debt into equity, meaning they swap money owed to them for ownership stakes instead of cash repayment. REE Automotive's chief executive Daniel Barel and vice president Ahishai Sardas will do the same with loans they personally extended to the company, a move the report says will increase the recovery rate for other creditors.
Additional funds for creditors will come from the company's available cash and expected receipts, including up to $3 million from a defense project the company is involved in, according to Globes.
Who gets paid, and how much
Tax authorities and employees are in line to be paid in full under the arrangement. Suppliers face a steeper haircut: the plan projects they will recover about 21% of what they are owed, though they also receive a conditional right to up to $3 million more if the company is eventually sold or exits.
Judge Hagai Brenner, approving the plan, said it was intended, in the words quoted by the report, "to preserve the company as a going concern and prevent the liquidation of assets, which would result in the destruction of value, employee layoffs, and a negligible recovery for the creditors."
An opinion from accountant Jacob Passi, cited in the filing, concluded that settlement was vastly preferable to liquidation.
How far the company has fallen
REE Automotive went public five years ago by merging with a SPAC, a shell company created solely to take another firm public, at a valuation of $3.1 billion. Its shares have since been removed from Nasdaq after the company failed to meet continued-listing requirements and now trade on the over-the-counter market in the United States.
The workforce tells a similar story. At the time of its Nasdaq listing the company employed 270 people in Israel; after further rounds of layoffs it now has 31, according to the court filing cited by Globes. Revenue in 2025 came to $1.3 million against losses of $55.8 million. Since its founding in 2011, the report says, the company has spent more than $1 billion in total.
The settlement administrator is attorney Ori Gaon. REE Automotive is represented by attorneys Yaniv Dinovitz and Neri Lavi of the Herzog Fox and Neeman law firm, the report said.
Source: https://en.globes.co.il/en/article-1001561423#utm_source=RSS