Update on potential bidders for Saab Automobile

The picture is starting to get as clear as mud when it comes to potential owners for Saab, but there are a few things happening and several Djup Strupes have been in touch and a loosed a few cats from the bag.
The groundbreaking word over the weekend is that Renco Group have reportedly withdrawn themselves from the race and the reason shared for their withdrawal is quite possibly going to prove to be a major achilles heel in this deal. Those of you panning the Koenigsegg Group for their withdrawal due to timing issues, most likely with respect to the EIB process and associated state guarantees, should take note.
GM are reportedly anxious about anyone including the EIB loan as a condition for their purchase of Saab, but buyers are considering the EIB loan as a necessity for getting the deal done as it provides essential funding for future development. The lack of clarity with regard to the status of the EIB loan is giving everyone pause (and it’s a big reason why Ksegg found the situation too risky and costly for their own planned progress).
A snapshot of where the EIB loan is right now….
What’s needed for the EIB loan right now is the OK from the European Union. The EIB has already given approval to Saab’s loan application, but this approval requires clearance from the EU to confirm that the state guarantees attached to the loan do not contravene EU regulations on state aid. The EU has not yet given this OK.
Once that’s given, it’s been confirmed that Saab should still be able to get the loan under a new owner (it was negotiated with Koenigsegg Group in mind) as long as that new owner sticks to the business plan that the loan was based on. There will most likely also be a review of the ownership group and structure to ensure that it’s sound.
All of this outstanding work is proving to be the weak point in Saab’s situation. Buyers want the EIB loan. GM doesn’t want a sale to be tied to the EIB loan. The Swedish government don’t want to do anything more than what they’re already doing with regard to state guarantees.
Someone’s going to have to give.
Whilst Renco might be “out” for the moment, this news gives a new meaning to the phrase “out”. Basically speaking, all of the current players have a chance to be back “in” – including Merbanco, Renco and the Koenigsegg Group – if all parties can find a set of circumstances that will satisfy.
It’s a comedy to rival Abbott and Costello’s “Who’s on first” and a tragedy worthy of Shakespeare – all at the same time.
Meanwhile, Spyker are reportedly heading to Sweden this week to take a sniff around, but as much as I like their cars and Victor Muller’s charms, one finds it hard to believe that they can get a deal off the ground – from scratch – in a time that will satisfy GM.
Beijing Automotive (owned by the city of Beijing, ergo…owned by the government) have apparently nabbed the older Saab tooling they were after and news reports say they’ve got the OK for a multi-billion dollar line of credit from the Bank of China (owned by the Chinese government). So the government’s OK’d a loan to itself? That doesn’t explain yet how GM (owned by the US government) will sell it’s latest technology in the form of the new Saab 9-5 to one of GM’s own rivals in China.
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So the big question, based on Djup Strupe’s intelligence and my own knowledge of Who’s on First is this: who’s going to give a little in order for this deal to get back on track?
Merbanco were not invited to negotiate further and Renco have now left the room. Those are the two remaining parties (after Koenigsegg’s withdrawal) who had the financial wherewithall to get this done. And yet all three could be back in if someone flexes a bit and allows the deal to get done.
I think it’s fair to say that this is a buyer’s market, so it’s either going to have to be GM who flex, or the Swedish government who will have to go an extra mile (they have a lot to lose here, too, remember) in order to get something across the line.
Thanks to Djup Strupe(s) once again.

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