I mentioned in my snippets entry earlier today that any potential new owner would have to re-apply for an EIB loan if such a loan was needed.
This came from a quote by Maud Olofsson, the Enterprise and Energy minister in the Swedish government. This is just a Googletrans, but it seems pretty clear cut:
Maud Olofsson also notes that the negotiations on EIB loans made are linked to Koenigsegg, which means that any new buyer must restart the process.
- As long as there is a buyer who needs to EIB loans to drag it on. But this is not a problem for a buyer with enough money. Do you have enough money, it allows.
So if you’re not Koenigsegg, you need to re-start the process. If you’ve got anough money, then you should be OK as you wouldn’t need it.
Well……
I’ve received a note from Djup Strupe* about this claim, and our inside friend begs to differ.
Putting it simply……
According to Djup Strupe’s knowledge of the matter, the EIB loan application is one made by Saab, based on a business plan developed by Saab with the Koenigsegg ownership group in mind but it could be taken up by any new owner who had a strong ownership structure in mind. These are the two critical elements – the plan and a solid ownership structure.
So if a new owner comes along and wants to implement Saab’s plan, then the EIB loans should still be available to them. Saab are the applicant and as long as the conditions described in the application are not altered, the loans should still be accessible. If any new application is needed, it would likely be a much quicker affair involving the credentials of the new ownership body. The plan is already known, approved and accepted (and just between you and me, well regarded)
The plan is the critical, time consuming element and that belongs to Saab.
——
*Djup Strupe is the name given to insiders who help us stay on top of things from time to time. It’s Swedish for ‘Deep Throat’
Related posts:
That Opel blurb...
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Swade, that’s a bit of good news in an otherwise messy situation.
I hope its enough.
If the worst happens and Saab is shuttered, will the true identity of Djup Strupe be revealed in time?
Maud needs to be sacked for so many reasons. Lets hope the Swedes see how she has tried to gut industry in her center right ideology of no bailouts. She’s one more “bad guy” in this story and I’d like to see her out on the street.
The EIB loan is presumably based on a specific business plan for SAAB
A new buyer stepping into K-segg’s shoes at this point would want to get comfortable with that business plan, or to modify it based on the new buyer’s own judgment. Either way could take some time. And the more modifications were necessary, the more likely the EIB application would take some time.
Hi all,
I am from Malaysia and own a Saab 93 Aero. I have a concern regarding spare parts if Saab is gone, can anyone share their view about parts availability when the car manufacturer is wound up.
How likely will those part suppliers continue to make the part for after market for the years to come?
Questions ?
Could Magna International still be looking at Saturn ?
What vehicle would they sell now the Opel deal has collapsed ?
Could this be a shared vehicle with SAAB ?
Would Saturn be a good stablemate for SAAB ?
Would Magna be a good owner for SAAB ?
Could Magna qualify for the EIB loan ?
Maud has an agenda to crush Saab if I am a conspiracy believer…
Right. Even though the loan may belong to Saab, the loan is predicated upon a certain plan. That plan changes with any given partner, thus it is indirectly linked to the partner at hand. The loan application would have to be at least heavily amended for someone else to come along now.
Right you are gents, but the plan has been developed by Saab and has received a lot of positive attention from the govt, the EIB etc. If someone wants to come in and change the whole shebang, then definitely the application would need to be re-done.
I guess what Djup Strupe is saying here is that it’s not strictly a necessity for the whole process to begin again from scratch. Saab believe a lot in the plan they’ve developed.
Of course, if a buyer doesn’t need the EIB, then all this is moot.
I still remain a little undecided.
I would go as far to say that the business plan is intrinsically linked to the Koenigsegg Group AB since some of the conditions of European Investment Bank (EIB) loan involve unique and environmentally efficient technologies that are currently being pioneered by Cargine Engineering AB and presumably Koenigsegg Automotive AB:
http://www.saabsunited.com/2009/06/what-to-do-with-600m-cargine.html
Furthermore, clarification needs to be sought as to which legal entity actually submitted the plan to the EIB and thus is held accountable for its receipt and subsequent investment.
And absolutely, for those investors flush with financial resources then it becomes a moot point!
Hypothetically, you could find another buyer that would want to amend little to nothing to the business plan, but what are the chances for that happening within a 5-week period of time? A new buyer would most likely have to do without the EIB-money, unless GM somehow delays the insolvency of SAAB.
Perhaps a more likely scenario would be that GM brings back K-egg Group to the table with a “sweetened” deal? Seems like the least energy-demanding step to turn SAAB into something positive for all involved parties given that K-egg Group essentially had a green light with regard to the EIB-loan with the exception of the EU commission (mostly a formality), and GM would be part owner in the new SAAB anyway.
I still don’t understand what went wrong with this deal.
I did my part. new 2008 9-3 on 9/3/2008 and new 2009 9-3 XWD on 1/17/2009 and I am already considering a 2010 9-5. I also stood behind my dealer. Will wait to see outcome. Warranty remains intact for now under GM. Happy, Thanksgiving.
“Could Magna qualify for the EIB loan ?”
I have another theory, would GM qualify? (sorry Swade Im just thinking out loud). GM could use the money and have Saab devolop new eco-technology for GME turning Saab into some kind of tuner akin to Lotus. Just a thought.
Someone has a lot to answer for, this is not just about K’egg pulling out! Why would Deutsche Bank recommend K’egg in the first place? Is it some kind of German plot to get rid of some kind of competition for Opel? Again, I am thinking out loud. There is SO MUCH more to this than meets the eye.
If GM goes back the bidding process, they might find more buyers in January 2010 than one year earlier.
With a already downsized saab, with prepared application to EIB, production equipment for 9-5 installed. Saab is a much more attractive company today. The current failure is not really saabs fault, its GM, Koenigsegg and the governments fault.
Imagine all those companies that now can start to borrow money again to improve their bids for Saab, and those that might be eyeing volvo, but considering how much cheaper it is to get saab. I personally believe that saab needs a combination of swedish, chinese and american owners to not just survive another 2-3 years but long beyond the next financial crash and recession.
As mentioned in another thread, Autocar today mentioned a backdoor for Hyundai to have had influence over Saab through the previous BAIC deal.
Just wondering if they really need BAIC for that.
I am still looking at Fuji Heavy Industries though, and if I read their balance sheet correctly, they should have ample capital to finance this deal. As in almost 2 Billion USD. Where as Hyundai Corp has maybe $330 Million, which is not a big chest.
(Please proof me wrong on the numbers)
Right now, main question, who has cash and wants a quick deal. Similar to buying a house, right. I believe Swade already made that statement before. Someone with cash is king, someone with mortgage is second tier.
General concensus is that future growth lays within China, ie Asia. Yet a deal between a South Korean car maker and a Chinese company is probably tricky.
So I opt for a Japanese company.
This is probably an odd point to bring up, but I’m just wondering if that EIB loan application has an expiry date if it is in fact “transferable” to a new potential owner?
Just posted at GMInsidenews. Looks like there is a possibilty GM may keep SAAB. If it means the brand lives all the power to them. In end if it wasn’t for GM SAAB would have died a long time ago.
http://www.gminsidenews.com/forums/f70/saab-decision-coming-soon-two-possible-options-86435/
I dont believe any of it…..
“The other option that the GM Board has is to retain the Saab brand, which is slated to have nearly an entire new product line by the end of 2010, all of which were designed/engineered under GM. If this option were selected we’re told GM would likely elect to shutter the Trollhattan, Sweden assembly plant so that GM could further leverage their other global manufacturing facilities across Europe. At the moment GM is finalizing their restructuring plan for their other European unit, Opel, which encompasses three German factories. Opel’s “home” plant, Ruesselsheim, is currently the sole plant building the Epsilon II-based model, the Opel/Vauxhall Insignia, that Saab’s new 9-5 is based upon. GM’s original pre-bankruptcy plan was to build the 9-5 in Ruesselsheim too, and with the 9-5 not yet officially on sale and in full-scale production, this seems to still remain the option.”
Why would GM shut the Trolhattan factory to build Saab’s in Germany where labour costs are so much higher? Makes no financial sense!
I don’t either, Zippy.
Ugh, just reading through that thread on GMI reminded me why I have not missed the culture of GM and it’s fans one freaking bit.
I truly hope Merbanco will reconsider and have the resources to close this. Going back with Opel, Chevy and GMC is a grim prospect.
Granted, probably better than dying, but that’s all subjective. Is paralysis better than death?
I just logged on and can’t believe what I’m reading.
We used to have an airline in Australia called Ansett. In a similar fashion it was dumped by it’s parent and a deal was struck with Solomon Lew and Lindsay Fox.
Days before settlement the deal was over and Ansett was no more. Ansett was a big company that people never expected to go under but it did.
We need to fight hard to save SAAB, because if it goes it will never come back.
A few crazy questions…
Perhaps I’ve got this crazy idea in my head because I’ve just watched the Mad Men season finale for a 5th time, but why doesn’t Saab just buy GM out? GM was essentially giving Saab away for free, so as not to take on the burden of closing plants, shuttering dealerships, etc.
Koenigsegg was going to be more of a figurehead anyway, without bringing much funding, large-scale manufacturing, or distribution networks to the table. Or was the funding from Fabela, et al, that substantial?
Now that the loan is so close, do they really need CvK and Co.? With the BAIC backing combined with the EIB loans and continued tech-sharing with GM, why can’t they go out on their own? Isn’t that essentially where there were going anyway, behind the thin veil of KG AB?
JK ,
Not such a silly idea at all!
SAAB could become totally autonomous as they once were .
Go for it Boys … Grab the EIB money and run .
Since Hyundai is going upscale with its own product line (Equus and Genesis), I don’t see the benefit in them pursuing Saab. The world’s 4th largest auto company, Hyundai is already a far more global brand than Saab, with production plants in Turkey, the Czech Republic, India, China, the US, and Korea.
As for a joint Chinese-Korean venture being a “tricky” prospect, I don’t see why. China is Korea’s #1 trading partner and Hyundai already has a 600,000 car manufacturing capacity in China alone. BTW: Hyundai runs its China operations under a joint venture with BAIC.
Merbanco still interested?
According to Expressen Merbanco has showed their interest for Saab again. Don’t know if there is any truth behind their story… maybe they just read SU and made up a story.
http://www.expressen.se/Nyheter/1.1792997/uppgifter-i-natt-nu-vill-bank-kopa-saab
@ Nico: I just checked the Autocar article and realize that you’re already aware of the BAIC/Hyundai joint venture. Were you thinking that a deal with them might be tricky for the Swedes, or perhaps GM? If so, I now understand your point.
Merbanco is still interested???
According to this article at http://www.expressen.se/Nyheter/1.1792997/uppgifter-i-natt-nu-vill-bank-kopa-saab Merbanco has showed their interest in Saab again. Don’t know if there is any truth behind the article or if they just read SU and made something up.
The Fact that GM could keep SAAB seems quite plausible to me, less the theory of closing the THN-Factory, or moving the 9-5 production back to Rüsselsheim.
The NG9-5 has to hit the street ASAP, so another delay (3-4 months) by moving the production back to Germany would be a suicide.
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And to the quote from Maud Olofsson; I don’t think she is that wrong, but I also don’t think Djup Strupe is also wrong. My theory is that a new owner would have to apply for the EIB Loan once again, but this time it would be a simple formal action as the conditions haven’t changed.
If the plan isn’t totally different it should be formal only, that’s right. I may most of all be a look at the new owner.
Best would be if, for example, Merbanco could take over Saab without needing the EIB initially and then apply for a loan for further development of green technologies. That would be the key to a quick deal.
GM Europe isn’t about sound economic reasoning….it’s all political…the german workers are so powerfull they will most likely get things done their way…
My opinion (small and worthless) is that the best thing for GM and Saab at the moment would be for GM to fund Saab as it’s done up till now, while continuing the sale process with another of the top 3-4 candidates. (please please please let it be Merbanco) But….they also need to get production ramped up, show increasing sales…re-establish consumer confidence (if that’s at all possible thanks to the media) It could drag out the process for another 9-12 months but it would be soooo much cheaper for GM than putting Saab in the trashbin.
Swadey: According to Collin and their inside “sources”, Merbanco & BAIC is discussing ownership of Saab:
http://www.aftonbladet.se/bil/collin/article6188962.ab
Marketing of Saab as a company for sale has not been optimal. First GM states that it is piece of scrap with continuing losses and they want to get rid of. Then Swedish goverment repeat the same mantra… Is this the right marketing when you try to sell something
Nice work. That is indeed just what Saab need.
Pekko + 1 too.
Also the swedish news paper SvD have some Djup Strupe
http://www.svd.se/naringsliv/nyheter/artikel_3849739.svd
Only in swedish, please googletrans.
Go CJ…
We should not forget that the EIB loan is linked to a state guarantee, and it is Maud Olofsson who is the responsible minister. So if GM or whoever wants to keep/buy Saab and wants the loan from the EIB, they need to get the guarantees from the Swedish state. Maud Olofsson demands that the owners should be in for the long term and they have to bring money to the table. So I guess the whole process of the guarantee has to start all over. And we all know how time consuming that process has been.
And finally another kick towards the entrepreneurs wannabes: Koenigsegg Group claimed they were gonna be long term owners. They lastet 6 months and all they did was waste Saabs precious time.
CJ, if you buy Saab I swear that I will support Saab all the way and I will buy a brand new 9-3 when the next generation is introduced!
Dear all!!!
Merbanco want’s to buy Saab!
This is in a Swedish daily today:
http://www.expressen.se/Nyheter/1.1792997/uppgifter-i-natt-nu-vill-bank-kopa-saab
Please googletrans and read for yourself!
It aint ove til its ove…
My thought is that GM will sustain Saab until they can find a new owner. It will cost GM far more money to shut Saab down than it would to support the company for another year. GM now has government cash at their disposal, something they didn’t have before when they first put Saab under review. The US gov is not micro managing GM as they stated before, the company wouldn’t be able to use tax dollars for foreign affairs. It’s the bailout money that’s allowing GM to pay for the restructuring of Opel. I think the Chinese are going to jump on this simply because Saab still has a presence in the Western markets and this could be critical for their future growth in the auto industry. As Hyundai and others are putting out more upscale models, the Chinese could use the Saab brand as an umbrella to release a competitive entry level model range such as Toyota did with Scion to introduce.
More on new buyers.
According to Aftonbladet. BAIC now want’s to buy the whole of Saab, and Merbanco is also on to it:
Please googletrans
http://www.aftonbladet.se/bil/collin/article6188962.ab
Well, all arguments included, chances for SAAB to survive are 50/50%.
I try to stay optimistic.
in my opinion, things are simple: K-sseg has the money and need to get rid of the Chinese
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