National Electric Vehicle Sweden (NEVS) says it considers it “very likely” it will secure approval for a compensation plan from 60% of creditors and exit the current reorganisation status.
This could see debts settled with 469 of NEVS’ 573 creditors in a composition arrangement with the remainder paid half what they are owed.
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The composition proposal includes an element of 50% for unsecured creditors on claims of more than SEK500,000 (US$60,00), meaning from a total of 573 creditors, 469 will get their full claim paid and 104 creditors will have their claims above SEK500,000 reduced by 50%.
Some 60% of creditors have to approve the composition proposal and if that number is reached, the District Court in Vanersborg will give its approval to an exit from reorganisation.
“Three weeks after that, the decision is legally valid,” a NEVS spokesman told just-auto from Trollhattan. “Then we will exit reorganisation – we consider that to be in the middle of April. We consider that [60%] very likely.”
The Swedish automaker held a meeting yesterday (26 February) in its Trollhattan factory, with around 60 creditors, the administrator, Attorney Lars Eric Gustafsson from Hamilton Law Firm, consultants PWC and Scandinavian supplier association, FKG, to discuss the composition approval submission providing creditors with some or all of their money back.
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By GlobalData“We had around 60 creditors at the meeting,” added the NEVS spokesman. “The purpose was more about further details about the information already given, for example, when will production of the 9-3 start again.
“That is the question that will be considered in the business plan with the new owner, so no decision yet. We have applied for the composition approval.”
The District Court will now consider the application from NEVS, but the automaker stressed this was to do with the number of creditors agreeing the deal, rather than issuing any legal judgement.
The manufacturer also insisted the alternative to not exiting its current reorganisation phase was for creditors to potentially receive far less than if they followed the compensation plan.
“The administrator is very good in explaining the alternative,” added the NEVS spokesman. “The other alternative is bankruptcy.
“We have discussed why a bankruptcy is not good – the main reason is most likely the creditors will not gain. We had PWC re-evaluate and they were present at the meeting. The property assets [for example have] a value as long as NEVS is a going concept, but in a bankruptcy, those assets are of a lessor value.”
No further details are as yet available concerning the identity of any new owner as the automaker has a non-disclosure agreement.
However, one further fly in the ointment could be Saab AB’s seemingly implacable opposition to the iconic name being used on vehicles.
Last week, NEVS told just-auto: “The new majority owner will not be able to invest without having rights to the name. It is an important issue for them.”
