NEVS seeking debt reduction with creditors in an attempt to exit reorganization

2014 9-3 Aero 03.12.2013

The Saab saga continues as National Electric Vehicle Sweden (NEVS) has submitted a composition proposal to unsecured creditors in an attempt exit their reorganization.

Designed to pave the way for a completion of their ongoing negotiations with two major OEMs, the proposal calls for unsecured creditors with claims over 500,000 SEK ($59,841 / €52,486) to receive 50 percent of their claim. NEVS says this would only effect 104 of their 573 creditors.

While some creditors won't be happy with the proposal, Administrator Eric Gustafsson believes the composition proposal is "advantageous" for creditors as a liquidation of the company would likely result in a "lower dividend several years later."

In related news, NEVS revealed some new details about their talks with the two undisclosed OEMs. As the company explained, one is looking to establish a technical joint venture company in Trollhättan while the other plans to become a new majority owner in NEVS with the intention of turning Saab into a "global premium product."

In a statement, NEVS CEO Mattias Bergman said "The negotiations are progressing but we also see the complication of reaching an agreement when we are in a state of reorganization. Our main owner has single-handedly financed the reorganization and intends to get us out of it. In order for this to be possible financially, we need to reach a composition arrangement with the creditors."