The Tel Aviv District Court approved a debt settlement for autotech company REE. The company carries accumulated debts of 51 million shekels. It will keep operating through a restructuring backed by new working capital.
Settlement funding
Kukac LLC and Ellj Limited will each invest US$2 million. Investors will convert 20 million shekels of debt into company shares. CEO Daniel Barel and COO Ahishay Sardes will also convert millions of shekels in loans into equity.
Company trajectory
REE went public roughly five years ago after a SPAC merger at a valuation of US$3.1 billion. Its stock was recently delisted from Nasdaq and moved to over-the-counter trading in the United States. The company now employs 31 workers in Israel, down from 270 at its market debut.
Creditor recoveries
Tax authorities and employees are expected to receive full repayment of their dues. Suppliers are projected to recover approximately 21% of their debt. They also hold a contingent payment right tied to an exit event.
Additional repayment sources include available cash reserves and expected operational receipts. These receipts include revenues from a defense project totaling up to US$3 million. The settlement plan is supported by an expert opinion from CPA Yacov Passy.