Djup Strupe and the shiftings sands

I know that after posts here on the weekend, many of you think that I think there’s little hope for Saab, that GM don’t want to sell.
Let me reiterate my main statement from the weekend. This was written in bold and is my main belief arising from conversations and reading last weekend:

A conservative summation of events this year has to lead me to believe that GM needs every possible push to negotiate a sale of Saab right now – they must be compelled to do so.

This is not to say that closing Saab is a fait accompli. Not by any means. Bottom line, it means that GM are being shifty about things and they will have to be held to account. It’s going to take a Godfather offer (without the guns, of course) to get this over the line. An offer they can’t refuse.
In that link, above, I gave you a timeline that explained my hesitations about GM’s genuineness in continuing to negotiate.
Here’s another timeline for you, with some thoughts in italics:
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June 16 – Koenigsegg chosen as preferred bidder for Saab Automobile
Koenigsegg’s offer included a condition stating that they must be approved for a loan from the European Investment Bank for funds that would allow them to invest in Saab’s future technology. This is seen as a key part of the business plan.
November 24 – Koenigsegg walk from the Saab deal, citing unacceptable risks due to a lack of time and difficulty getting all parties together.
Read this as: the EIB loan and all the associated guarantees were taking too long, creating too many losses and too much risk for the business plan they established when they first got involved with the Saab purchase.
December 2 – Spyker announce their interest in Saab, and end up submitting an initial proposal to GM that includes the EIB loan as per the Koenigsegg deal.
December 18 – after receiving initial bid from Spyker and despite continued interest from Merbanco, GM announces that Saab will be wound down.
December 20 – Spyker submit a revised offer that “would remove each of the obstacles that were standing in the way of a swift transaction……..The new offer eliminates the need for an EIB loan approval prior to year end, for example, which will allow the deal to be concluded within GM’s deadline”
December 22 – A member of the ‘Sason’ consortium (my name, not their real name) says “Merbanco together with Swedish group are working hard with government on bridging EIB loan with a guarantee to GM as long as it takes to have the EIB in place.”
I can’t find a direct quote, but you can take that quote above to mean that Merbanco/Sason were bidding on Saab knowing that they wouldn’t have the EIB loan in place at the time of closing the deal. That means that like Spyker, they had removed the EIB loan as a condition of the offer made.
December 31 – A “GM Official briefed on the matter” told David Welch of Business Week that GM were “yet to receive a bid that has financing secured” but the article also said that “GM had as many as a dozen potential bidders, most of which lacked funding or industrial capabilities”
So bids don’t have “financing secured” but that’s not to say that all bids lacked funding or industrial capability, just some of them. Those that lack would probably include bids like this one.
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Let’s stop the italics there.
Summing that up, we have a deal that included the EIB loan, then several serious offers that waive the EIB loan as a condition of the sale – and GM still plant a story in BusinessWeek stating that buyers haven’t secured funding.
With the EIB loan removed as a condition, the implication from GM in the BusinessWeek story is that both Merbanco and Spyker are under-funded, that they’re trying to buy Saab using pocket change instead of serious money. Are we to believe, then, that both companies are comprised of idiots and dunces who are stupid enough to bring pennies instead of pounds to the table?
No, I don’t think so either.
Both groups have been in discussions and have been taken seriously by both the Swedish Government and GM’s own agents, Deutsche Bank. So either Deutsche Bank aren’t earning their fee by presenting qualified buyers, or someone broke wind in GM’s spacesuit and it’s got them a little dizzy.
The only financial issue that’s ever been a point of contention through this whole Saab deal is the EIB loan. There has never been a question raised – either by GM or by others – about the respective bidders’ ability to bring operational finance to the table that’s sufficient to tie them over until the EIB loan is approved (and remember, the EIB loan has been approved based on the business plan. What remains is approval of the new owner and I’m quite sure these bidders wouldn’t proceed if they weren’t extremely confident in that area). The only financial issue is that big chunk of money required to invest in Saab’s future.
Something’s rotten in Detroit.
It seems there has been a shift in what GM require of bidders and it’s probably happened in the last 2 weeks, since shortly after Spykers’ re-submitted bid. Faced with a bid that addressed all of GM’s initial problems, they blinked and have essentially started the process again, calling for re-submitted bids by January 7.
The big question is why, when faced with a bid that supposedly satisfied their criteria, have they asked bidders to re-do their homework? If the only matter of financial concern is the EIB loan, then what is the funding that bidders need to have secured in order to satisfy GM?
Are they now requiring that bidders secure funding in EIB proportions prior to a deal being done, despite the fact that offers to waive the EIB loan as a condition of the sale?
Such a move would make them look like a wonderful, benevolent father trying to assure Saab’s future but is it actually necessary in terms of completing a sale or is it a convenient addition to make the job of the bidders that much more difficult?
Let me summarise it this way:
Bidders are confident enough to bid without having their EIB review finished yet, which means they have operational funding to carry them through to that point. What is the funding that remains unsecured at this point?
It would be handy if reporters in Detroit would seek answers to those questions and publish them with the same speed with which they publish inside info from GM Officials.
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Like I said over the weekend – this decision’s going to be made in America, so that’s where we need to make the most noise.
US Saabers – Write to your government representatives and stress that action is needed in the very near future.
The time is now.

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