NEW YORK ( The Deal) -- Stalling Swedish carmaker National Electric Vehicle Sweden, or Nevs, on Wednesday admitted it didn't have enough cash to pay suppliers but said it wasn't yet insolvent after a supplier asked a court to push the maker of Saab cars over the brink.
The supplier has since rescinded the request, according to Nevs, which said its assets currently outweigh its debts. The company also said it's in talks with two unnamed "major" carmakers.
It didn't give a timeframe for resuming production, which has been on hold since its latest woes began in May, but insisted it would eventually be able to pay its debts.
"After the funding is secured, and after […] Nevs' business plan is updated together with its new partners, Nevs will be able to make the decision on when the Trollhattan factory can resume its production," the company said."Nevs today cannot say exactly when," it added, "but Nevs' suppliers will get paid." Supplier Labo Test AB had asked a Swedish court to push the company into insolvency after Nevs failed to pay a 150,000 Swedish kronor ($21,800) bill. The Swedish government has said it has also collected millions in claims against Saab from other suppliers awaiting payment, casting additional doubt over Nevs' future and the future of cars once-synonymous with Sweden. Nevs bought Saab in 2012 with hopes of using the carmaker's designs and expertise to produce electric cars. The company, which is 51% owned by National Modern Energy Holdings Ltd. and 49% held by Sun Investment LLC, then resumed production and made a handful of Saab cars each day at the company's factory. When it halted production again in May, the company said "The root cause of the current situation is that one of Nevs' investors has not fulfilled their contractual obligation to finance the operations." It did not say which of its investors it was referring to. National Modern Energy is the investment vehicle of Sino-Swedish businessman Kai Johan Jiang, and Sun Investments is a Japanese technology investor. The factory was last mothballed as part of a 2011 bankruptcy in the run-up to the sale. At the time, Saab was owned by Dutch high-end sports carmaker Spyker NV. Spyker had purchased the manufacturer from then-bankrupt General Motors (GM) in 2010. The 2011 bankruptcy lured a number of bidders for Saab including China's Zhejiang Youngman Lotus Automobile Co. Ltd. and Zhejiang Geely Holding Group Co. Ltd., which bought domestic Saab rival Volvo Cars AB from Ford Motor Co. Saab produced cars for about 50 years and was part of the Saab AB industrial conglomerate before the car activities were sold to General Motors in 1990.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts