National Electric Vehicle Sweden (NEVS) has been granted creditor protection by a Swedish court, as negotiations with other car makers drag on.
On Thursday, Swedish time, NEVS had its initial application for bankruptcy protection rejected. According to Reuters, NEVS’ plans to secure funding were dismissed because they were “vague and completely undocumented”.
In response the company submitted a second protection request on Friday, which has now been accepted by the court. Dagens Industri reports that the court saw “no reasonable grounds to believe that the purpose of the reorganisation can not be achieved”. Attorney Eric Gustafsson, who was nominated by NEVS, has been appointed as the company’s administrator during this reorganisation period.
Court filings indicate that NEVS has around 400 million krona ($61 million) in liabilities; the company collected just 41 million krona ($6.3 million) in revenue last year and lost a total of 601 million krona ($92 million) in 2013. Without the protection that it has just been granted, Swedish courts could have ordered the company to sell off assets in order to pay its creditors.
The Swedish business daily also reports that defence company Saab Group has, in light of NEVS’ entry into administration, withdrawn the company’s right to use the Saab name. Speaking to the Wall Street Journal, a NEVS spokesman said, “We expect to renegotiate the agreement [with the Saab Group] as soon as a new owner comes in”.
NEVS stated that it applied for protection because “the tripartite negotiations we have with two global vehicle manufacturers are still progressing, but are complex and have taken more time than we predicted. We need additional time to complete the negotiations and reach an agreement. Therefore, we apply for a reorganisation. We intend to fully pay our debts to our suppliers.”
Reports indicate that one of Saab’s potential saviours is Mahindra & Mahindra. The Indian automaker currently owns Korean SUV manufacturer Ssangyong and was keen on purchasing Saab back in 2012, only to be beaten out by NEVS.
NEVS hasn’t manufactured a Saab since production was halted in May this year, although the company did roll out a 9-3 EV prototype last week to counter some of the bad news swirling around the company.