Nevs applies for prolonged reorganization and composition proceedings

Today, Thursday February 26, 2015, National Electric Vehicle Sweden AB (Nevs) applies for prolonged reorganization and composition proceedings to the District Court in Vänersborg.

In a meeting at Nevs today, the company and the reorganization administrator will inform present creditors of the composition proposal sent earlier, together with Nevs’ goal and plan to exit the reorganization.

40 thoughts on “Nevs applies for prolonged reorganization and composition proceedings”

  1. Question to people more familiar with local laws and this case: Are the courts now doing anything to protect the creditors from KJJ or others selling off assets while this drags on? In other words, is there a way for the courts to put NEVS assets in escrow so that key players can’t grab the valuables as the ship sinks? This might have been reported on before, but I don’t remember. I’m just wondering if what’s left can be grabbed by NEVS owners while reorganization takes place—-and at the end, if it all sinks, they will have walked off with money and nothing’s left for the creditors. Just wondering. In smaller businesses in the U.S., this sort of thing happens.

    • I am not a jurist so I can’t tell you if that is something which could happen legally, but it isn’t happening. I have read most of the documents published by the reconstruction administrator today, and it clearly states that at the time the reconstruction began, the parent company NMEH had a claim on NEVS of 171.6 million US dollars, approximately 1.271 billion Swedish kronor.

    • The documents from Hamilton Law Firm also states PricewaterhouseCoopers has been engaged in, amongst other things, determining whether there has been any “borgenärsbrott” (crimes against the creditors). Their conclusion is that they have no reason to suspect any such thing.

  2. My reading of googletrans of indicated that they must have an agreement of at least 60 percent of the creditors l, and that their debts together shall constitute more than three-fifths of the total for the court to consider reconstruction…that they have until March 2 to reach those levels, and response so far indicates that they will….It goes on to say that there is as of yet no written agreement with the OEMs partly because of the trademark issue but also because the OEM want an agreement with the creditors…then negotiations could be completed promptly..

    Haven’t we heard this song and dance before? And as Angelo asks, will there be any protections agains KJJ stripping the assets if they leave reconstruction? One answer to the second question might be that the agreement with the OEMs might be worth far more to him financially than selling off assets.

  3. worth of notice is that the return of Chinese Qingbo. Qingbo will not quit as we had expected, but said they will “play a more active ownership role” in fututure NEVS, which may mean that the business plan of producing 400k/year JV in Qingdao China in 2013 will likely be resumed. and future NEVS will be the triple JVs among NMEH, OEM1 and Qingbo. Another interesting info is about the financing plan from one of Chinese state-owned bank to the development JV between NEVS and OEM2.

    • Tianalfred —

      Is the Qingbo news new? Are they back in with NEVS some how? And what does “triple JVs among NMEH, OEM1 and Qingbo” mean? I’m getting so confused about all of this…please help me understand what’s gong on! Thanks!

      • NEVS has been a JV between NMEH (78%) and Qingbo(22%) since Jan. 2013. But Qingbo failed to provide promised loans to NEVS after injecting only 650 million SEK for 22% stakes in NEVS, which is the direct trigger for NEVS’ production shutdown and entry into reorganization. NMEH has to fiance NEVS single-handedly since then. According to last Dec’s business plan, OEM1 will takes a dominant stakes in NEVS (max. 80%) and kick out of Qingbo. But now Qingbo is coming back and the future NEVS has to include Qingbo, NMEH and OEM1. you may read it here with the help of google translate

    • No, please no. Qingbo has proven that they can’t be trusted. They acted erratically and in fact, we’re read right here on Saabs United, various opinions (both by staff and readers) that in large part, Qingbo withdrawing investment directly led to NEVS collapsing. I don’t know whether that’s true or not—-but I do know that they are not to be trusted as a business partner at this point. All ties with them should be cut if Mahindra wants in and wants to be able to rebuild Saab in a consistent, effective way. Having a “partner” who one week is “all in” and then the next week is “out” and then months later—says they’re back in? Worthless.

      • Angelo, I share your sentiments concerning Qingbo, but we really don’t know the full story, do we? Although their withdrawal of investment apparently led to the collapse, why did they withdraw their investment? Perhaps,.they were only being prudent when NEVS didn’t meet whatever performance that was required and they saw they were dealing with the jokers that we’ve all come to (not) love so much. Perhaps, they are, and always have been, part of a power play behind the throne, to oust NEVS from control.

        • We heard that they were the ones who pushed NEVS to produce gas powered cars, then bailed on NEVS. Look—-I think building gas powered cars is the only way Saab will ever survive…so I don’t have an issue with the fact that they built those 9-3s. But again—-it’s Qingbo forcing their will on NEVS, then bailing out? Seems really unethical at best.

      • Did anybody here know why Qingbo did not meet their promise of providing loan? my understanding is that Qingbo is a subsidy of Qingdao Huatong, which is a state-owned national assets management company, on behalf of local government to run the state-owned assets. Liu Min from Huarong is sitting as a board of director in NEVS representing Huarong and Qingbo. But he has to left with the pressure from within Huarong. another on is Mr. Li chenggang, vice mayor of Qingdao, was shifted from NEVS business to other government running business. Sun Hengqin, who is the party sececrety of Qingdao New Development economy district, the main driver for the NEVS Qingdao production base, was also removed from his role. even the overall development plan of Qingdao New Development district, which is a newly established national-level development district, has removed the “new energy vehicle” from its key project list in the approved development plan by Chinese state-council.

  4. Angelo, it would be hard to believe that a firm seeking reorganization could divest of any assets without the court’s approval. The concept of a corporate reorganization is generally consistent across developed countries: protection of the firm against actions by its creditors that would force it to liquidate and cease to exist. But the other side of the coin is that the interests of the creditors are also protected, and the firm cannot (beyond certain thresholds) accept new creditors, increase existing debt, or sell off assets without the administrator’s approval. I don’t think we should be concerned about that.

    • Well that’s certainly the intent and perhaps it’s also the law (prohibited from selling off assets without the administrator’s approval). I guess my concern is how closely the Swedish courts are guarding this. If people get desperate, they sometimes break the rules, particularly if they can fade away in another country with some hope of protection (i.e. KJJ in China). The longer this thing is strung out, the more temptation there might be to covertly sell off some assets or absorb them privately somehow—-cook the books—-make some things disappear. The only way to guard against that would be if strict auditors are in place, circling like sharks to clamp down on any funny business.

      • I am sure the creditors are watching this closely, and the investors will also be keeping a close eye on things. If that sort of funny business occurs, then the whole thing will fall apart and devolve into a quagmire of litigation that will drag on for a long time. If the investors see anything fishy, they will walk, and I doubt NMEH wants that (see below). If the creditors see any thing fishy, they will likely petition the court for an injunction to protect their interests. The court could even place NEVS fully under the control of a separate, neutral, party if they were concerned about the behavior of the current management. Or the court could force a liquidation, and again NMEH doesn’t want that. NMEH wants a deal with a new investor so it has some hope in hell of recouping some of its investment, so that should keep things in check.

  5. Also, the letter from the Hamilton law firm makes very clear the motivations of the parties in the proposal for creditors. As I suspected, the letter makes the point to the creditors that the proposal will provide them more funds than a straight bankruptcy/liquidation, so they have an interest in accepting it. Further, the letter indicates that the NEVS owner, NMEH, has converted the majority of its loans to NEVS into shareholder contributions, which very likely means that there is no way for NMEH to recoup those funds other than a sale to a new investor. Finally, the letter makes the point I suggested earlier that the continuing reorganization is creating a discount in any price that the new investors are willing to pay given uncertainties with the creditors. Securing the agreement of the creditors in a deal provides certainty and removes a major obstacle to the negotiations with the new investors.

    Regarding treatment of the creditors, the Hamilton firm would likely argue that they are treating all of the non-prioritized [probably meaning non-secured] creditors equally since they are making the same offer to all of them. The SEK 500k threshold may impact some creditors differently, but the law firm would not likely make an offer that was in direct contravention of Swedish law.

    If I were a creditor, weighing the possibility that I might get much less in a liquidation that might take another couple of years to wind down, I would likely take the deal. I hope they do, so that the negotiations with the new investors can move forward. With a real deal in hand, M&M and/or et al. will have better leverage with SAAB AB over the brand name. Fingers crossed, again.

    • Here is the full document published by Hamilton Law Firm today:

      I am currently halfway through the 45 pages and regarding Qingbo I have so far noticed that the reconstruction administrator clearly state that the missing payment from them was the main reason for NEVS’ financial troubles. However, there is also a statement that Qingbo wants to take a more active role as a shareholder in the future and have recently visited Trollhättan to meet with NEVS’ management.

      • Qingbo is not back in the game. Thats just a rumor spun out of thin air.
        Some of it is readable at “”

        “The other current share holder in NEVS, the city of Qingbo seems to be showing some signs of interest in the process. After essentially causing the whole insolvency (and thereby the reorganisation) they disappeared from the radar, only to reappear in December through a delegation visit to Trollhättan. Apart from a commitment “to play a more active role in the dialogue with the Chinese authorities”, it doesn’t seem that Qingbo is going to be playing a role with funding any time soon however.”

  6. Not rocket science.
    1 The Wallenberg family – who controls Saab AB – did not want to risk their reputation, nor kill their baby – SAAB. Hence they – reluctantly – allowed NEVS to use the brand – under strict conditions.
    2 NEVS did not perform – Saab AB used the contract to withdraw the rights.
    3 Mahindra tried to get the brand – no go. “There had been talks before”.
    4 Saab AB has showed to the public, by advertising in the state owned TV – which they have not done before and none of their customers view – that Saab AB is a strong and healthy company with a SAAB logo.
    5 Today a PR person for Saab AB said to Svenska Dagbladet that there are no talks and that the reconstruction administrator was lying about ongoing talks!

    It is difficult to tell the future, but one thing is obvious – SAAB as a brand name for cars is a no go.

    • All of us knows, there is not future from 2010… Every day check some positive news, but no positive news yet. And will not come. Only way is SAAB AB start to produce cars without US and Chinese money…. Why not?

    • Yeah, like I said above, if that story about SAAB AB’s views are true, we’ll *NEVER* see another new SAAB-branded car in the world, ever again 🙁

    • Seems like we were all taken for a ride by NEVS. Lies. We were bamboozled by them, just as the Receivers were a few years ago. I don’t want to offend anyone, so I’ll be very careful with what I say—-but let’s put it this way: I have not seen ANYTHING in 3 years that demonstrates even minimal honor on the part of NEVS owners. No experience, no ability, not enough money, no honor. This was the worst disaster fans of Saab could have ever been subjected to. Many of us called it a horrific mistake when it was happening back in 2012. We have been vindicated. These people are losers. I’ll let it go at that without getting vulgar or hateful, as much as I’m tempted to.

      • You are on the verge of defamation here, Angelo. I’d suggest you keep calm until you have any proof for your claims. I do not for one second believe that you have any more information than the rest of us do.

        • I’m entitled to my opinion JH. Not stating this as “fact” but as a very well informed opinion. How can they possibly argue that this has been anything but an epic failure—-a humiliation?

        • Saabdog: Right out of the gate, their rhetoric seemed bizarre at best—-ignorant and silly at worst. All of us wanted badly to believe, even getting excited over things such as the Chinese province ordering 200 cars (as though that would make a difference—-and of course it never panned out anyway). NEVS was detached from reality and we saw that from day one.

  7. Here is the good news:
    –The Creditors Committee has backed the debt reduction plan with all creditors. That is very good to see.
    –The report [] indicates that accountants have performed investigations into the soundness of the NEVS books and transactions and nothing problematic of any significance has been found. As I said above, this reorganization is being administered by an established Swedish court with sound reorganization laws and protocols, much like a Chapter 11 proceeding in the US. I think we can trust the Swedish legal system to handle this appropriately. Remember, the creditors have lawyers too.
    –The administrator is an attorney appointed by the court to administer the reorganization, and its hard to see that he would intentionally jeopardize his professional standing and lie about the negotiations with SAAB AB. Clearly there is confusion as to whether these negotiations resumed late last year, in an official way at least. Maybe NEVS has been having “off the record” discussions about the brand.

    I think we need to wait and see and not jump to the conclusion that all is lost quite yet. The action by the creditors to accept or reject the settlement offer is the key to whether this continues or unravels. That is what we should be focused on.

  8. p.s. Note that the SAAB AB guy was asked if there were even just exploratory contacts taking place, and the response was “No, I wouldn’t call it that.” There is clearly an “it” to be called something, which suggests that some kind of dialogue has been taking place, call it what you may. It also seems surprising that a press officer would accuse a court-appointed administrator of “lying.” That seems beyond the pale, frankly.

    • Paul: I am an eternal optimist too but wow, you’re really reaching here. I hope you’re right that there’s some glimmer of light here—-having a hard time seeing it right now.

Comments are closed.

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.