Tel Aviv Court Approves Debt Settlement for Autotech Firm REE
The Tel Aviv District Court approved a debt settlement for autotech firm REE, burdened by 51 million shekels in debt. The company secured fresh capital injections and equity conversions to avoid liquidation.
The Tel Aviv District Court approved a debt settlement on Wednesday for autotech company REE, which accumulated debts totaling 51 million shekels. The company will continue its operations under a restructuring plan backed by a fresh injection of working capital.
The arrangement relies on new investments of 2 million dollars each from Kukac LLC and Ellj Limited. REE went public roughly five years ago following a SPAC merger at a valuation of 3.1 billion dollars. Its stock was recently delisted from Nasdaq and moved to over-the-counter trading in the United States after failing to meet continued listing requirements.
Following successive rounds of layoffs, REE currently employs 31 workers in Israel, down from 270 employees when it debuted on Wall Street. In 2025, the company posted revenues of just 1.3 million dollars, while its losses reached 55.8 million dollars. Since its inception in 2011, the company has burned through more than 1 billion dollars.
Judicial Rationale and Restructuring Terms
Judge Hagai Brenner emphasized that the settlement aims to preserve the company as a going concern and prevent liquidation asset sales that would trigger value destruction, employee layoffs, and negligible debt recovery for creditors.
Under the agreement, investors will convert 20 million shekels of debt into company shares. CEO Daniel Barel and COO Ahishay Sardes will similarly convert millions of shekels in loans they provided to the company into equity, thereby increasing the distribution rate for creditors.
Additional funding sources for creditor repayments include the company's available cash reserves and expected operational receipts. Notably, this encompasses revenues from a defense project involving the company, totaling up to 3 million US dollars.
Tax authorities and employees are expected to receive full repayment of their dues. Suppliers are projected to recover approximately 21 percent of their debt, alongside a contingent payment right of up to 3 million additional dollars subject to an exit event. The settlement plan is supported by an expert opinion from CPA Yacov Passy.
