Guy Lofalk talks to Swedish Television *Translated
October 22, 2011 in News
This is only in Swedish but basically outlines what we have heard before, he does wish for a good result for Saab anyway.
A big thanx to DavidV for taking the time to translate the article for us!
Svt: Could you please explain what your assigment with Saab is?
GL: I was chosen by the court to be the company administrator and that means primary to investigate if there is any assumption to recontruct saab and if there is any assumptions then I have to Togheter with Saabs manegment to make an reconstructions plan which we will have be finishen by 31 of oktober
svt: What have You come up with so far?
GL: The situation we have now is that Saab is missing liquidity to go on, and we have not recieved the liquidity that had been promised when we started the reconstruction plan, which was EUR 70 milion, and that was also one of the conditions to start this mission. We have also understod that the original plan which was that Pang Da and Youngman would invest is Swan and then furter on invest in saab, does not longer exist and we are trying to find other solutions.
Svt: Will youngman and Da pang invest money direct in to Saab?
GL: That is a question that has to be decided between the owners, which means the stock holders and the investors.
SVT: Thoose 100 milion that was suppose to arrive from China, did they arrive?
GL: I dont know where you got that information from but we have not recived that kind of money.
Svt: Have there been any money at all?
GL: We have got some smaller amounts like twice 4.5milion dollars and once 1.5 milion dollars so we have been able to keep our nose above the surface.
Svt: How come no money arrived sofar?
GL: What I have seen is that the parts have not found an agreement about the deal that was suppose to bring those 70 milion euros. There has been a lot of discussions about this agreement and thats why no money have been transferd.
Svt: So you think that a reconstruction is no longer current because there is not enough liquidity?
GL: The liquidity is about to end so we can not continue the legal process so we have to terminate.
Svt: How did Saab react to this information?
GL: Ofcourse everybody is very dissapointed and saddened.
Svt: All the people that are involved and dependent on this, what would you like to tell them?
GL: That the legal process has placed restrictions on this and I can just hope that the owners and the investors can find an agreement that could save Saab.
Svt: Victor Muller and his crew, are they credible owners?
GL: Swan is the owner of Saab and that is a fact, so they are in charge.
Svt: Would you rather see some other owners?
GL: This is a question that I do not take a position, this will the owners and investors have to decide.
Svt: The latest that Victor Muller is in USA, what can you tell about that?
GL: He is in USA and there is a time difference in 6 hours (smilning)
Svt: So You don’t want to comment anything about what he is doing there?
GL: We are keeping eachother informed and he is dealing with Nort Street Capital
Svt: Is China interested in buying Saab at all?
GL: As I understand China is very interested
Svt: How will it be now in the future for them? Will they continue to try to buy Saab?
GL: As far as I know there is negotiations now with the owners.
Svt: How do you see the future of Saab?
GL: I really hope they will find a solution
Svt: Do you think they will find one?
GL: I hope so
Svt: As it looks now?
GL: Very hard for me to say because I am not versed in the latest negotiations
Svt: How do you see your role now after taking this decision?
GL: I’m the administrator as long as the district court has not completed the reorganization and during that time, I will maintain my role simply, as good as I can.
Svt: You’ve now been to two meetings in China, how has it gone?
GL: My first trip I did with Martin Larsson from Saab, the intention of the trip was to try to sort out problems that could remain with the payment of EUR 70 million and tell the Chinese investors the amount of capital needed to resume production and development of new models and we did not succeed.
The second trip was hosted by the Pang Da, Youngman and NDRC. And the purpose of the trip was to explain to the NDRC how the situation was for Saab and that they needed to take a decision quickly, partly to finance the reconstruction but also for the investments Pang Da and Youngman would have to do to get Saab back on its feet
Svt: You were not aware that Pang Da and Youngman were looking for 100%?
GL: No, they presented this information on the NDRC meeting.
Svt: What do you think would be a solution for this?
GL: One solution would be to get along and find a common solution and sort out the questions that exist. There is financial opportunities for Saab to get back on track
Svt: Are there any other recent buyers in the current situation that would be willing to take over Saab?
GL: We have none that I know of that has come so far in the process. And especially that we see now is that the money in the restoration process is about to end, and that’s the problem, and thats why I had to request the restoration plan to be terminated . I submitted deadline time to two o’clock yesterday, and by that time the funding had to be there because otherwise I had to stop reconstruction. And when the parties had not managed to agree and they are no more money in the account, and the other requirements were not met , I am guilty as administrator to follow the law and terminate the restoration plan.
Svt: Could you say why the Chinese have been so interested in Saab?
GL: I can only speak of what they have told me and what they believe is that it is a very nice company, very nice technique and great products. They would need to sell more cars, and they think they can do it.
Svt: Should they not be able to come up with the necessary money then?
GL: Well we think it but they are something that must be resolved between Chinese investors and the owners.
Svt: What happens now?
GL: Now, Saab will have the opportunity to be heard and they have until Thursday, then the district court will decide.
Svt: If they decide that Saab is bankrupt, is it the end of Saab?
GL: It will be split up but until then maybe the parties will find an agreement and we can resume the reconstruction process which I think would be fantastic
Svt: Would it not be more relevant for the Chinese to buy after bankruptcy?
GL: I dont think it would be as attractive to them as it would be buying a vibrant business
Henrik said on October 22, 2011
It´s basicly what we heard before, but I like his tone. He says he had a deadline when the money from Youngman had to be on the account and since it wasn´t, he had no choice but to end reconstruction, he says they did not pay any 100 m sek, but rather $ 4 million and then $ 1 million. He says that the chinese are very interested in buying Saab, but suddenly changed their minds and wanted 100% of saab and not any stake in swan.
What I haven´t heard before is that he hopes swan and the chinese can find an agreement very soon so they can pick up the reconstruction again, and that he knows they are negotiating right now.
It feels like this is a part of a very tough negotiation, perhaps Youngman/ Pang Da didn´t think Victor would go this far. Let´s hope Victor is right, perhaps this will end well after all.
Khrisdk said on October 22, 2011
I don’t think anybody expected a game of russian roulette with 3 bullets.
Actually VM holds a lot of cards at the moment, because he is willing to go full in.
He might win yet.
The actions of Lofalk were inevitable with the current situation.
But I still think he made an error of judgement regarding Geely
Troels, Denmark said on October 22, 2011
Very interesting to hear. GL seems to have a very clear and professional approach – and I also think he has goodwill for Saab.
SWAN and the Chinese partners should agree in the nearest days and there will still be possibilities – also to restart the reconstruction-process!
Thilo said on October 22, 2011
+1
Trued said on October 22, 2011
Sounded like GL was looking forward to a re-start of the Reconstruction process!
Chris Hansel said on October 23, 2011
Sounds to me as if Loflak might have stopped the restoration process, not to hurt Saab, but to pressure the Chinese to do what they claimed they were going to do in the first place. Could it be that Loflak is working with VM, and not against him?
Carlo A said on October 23, 2011
You know, I was thinking the same …. it is like saying to the Chinese that the have one week to close the deal or the deal itself may vanish with SAAB bankruptcy
griffin up !!!
scand said on October 23, 2011
No. He stopped the process simply because of the fact that the 70 million eur is not in saabs account. Therefore it is out of money. The promised 70 million was the convincing argument to enter into reconstruction, without which, the courts would have in all likelihood denied ithe protection request, and Saab would have been bankrupt back in September.
He can only go on fact, not promises.
Trued said on October 22, 2011
GL says that the Pang Da and Youngman suddenly at the NDRC meeting brought up the 100% buy interest of Saab NOT Swan. GL seams to have been surprised when that happened.
The interview has an underline and that is a feeling GL wants Saab to survive. Lets hope for that.
Troels, Denmark said on October 22, 2011
I agree in this understanding.
skwdenyer said on October 22, 2011
Given the tone of comments here in response to the interview (which I can’t understand, as I speak only English!), it seems a shame that GL has not previously come out and spoken with the press.
hilmar said on October 22, 2011
Exactly. Much irritation could have been avoided.
Gustaf said on October 22, 2011
That must be the worst journalist(?) I’ve heard in months! Ridiculously bad. GL acted carefully and avoided several question by answering something totally different
davidgmills said on October 23, 2011
This is what commonly happens in bankruptcies/reorganizations and is often planned. New money is needed for the reorganization. The entity or entities with the new money decide for what ever reason they would rather purchase the old company in bankruptcy and have total control of it rather than reorganize the company and have partial control. This is what I figured would happen with the Chinese (not picking on the Chinese because many other entities from other countries might have done the same thing). As they say, its just business. The Chinese have the money and Mueller doesn’t. So the prudent thing, if you are the Chinese and you want control of the company, is to let Mueller go down the drain. Sure it hurts Saab employees and suppliers, but the Chinese have plenty of their own, so there is no reason for them to care.
100%Saab said on October 23, 2011
So, if that’s the game sell to someone else.
davidgmills said on October 23, 2011
I agree.
davidgmills said on October 23, 2011
One other thing to point out. Saab is not a vibrant business now. So Lofalk’s comment that if the investors wait to buy Saab after bankruptcy they will not be buying a vibrant business is probably not really accurate. I am sure the Chinese know that Saab is not very vibrant now.
What I also think is that if the Chinese were really serious in keeping Saab in Sweden, they would have made the bridge loan a long time ago and not forced so many people out of work and so many suppliers to cut Saab off.
I sure hope VM is able to do something with the American hedge funds group. I doubt they would have any reason to move production to the US or change management. Much better deal for VM. I think Lofalk thinks the same thing. He’s obviously a bright guy and has figured out what the Chinese are up to.
Presic said on October 23, 2011
“Vibrant” is an English translation from Swedish, so I am not sure if he meant that exactly. Sure thing is that the brand name right to SAAB will be gone at the moment the company is bankrupt. Would you buy SAAB buy not be allowed to call your product SAAB?
Tripod said on October 23, 2011
He says “levande [företag]” i.e. “alive [company]“, i.e. a company that is alive; one could say with some better words: active, existing company, still in operation.
On the other hand, going, as in going concern, or even thriving, or flourishing, would indicate no threats of liquidation or similar, doing well, perhaps even expanding etc. And vibrant, as in vital and lively would also indicate something similar.
Then we can debate for hours how well or not Saab is doing at the moment, but that is not the point. I think he meant “a company (although there are 3 of them) still in operation”, as opposed to being bankrupt.
I assume, as a non-native speaker of English.
No one knows what would happen with a bankruptcy in this case, but journalists still ask similar questions, there seems to be a “common knowledge” out there that says: “yep, that’s how it’s done, you pick up the pieces”. And then somehow, it’s assumed, those pieces can be put together again to a running car company; and some even seem to think it would be another Saab. Wow.
Ah well, lots of uninformed people, journalists et al; she asked at end before GL’s reply “… and if they decide to declare Saab [i.e. the three companies] bankrupt is that the end for Saab? Or …” As if the court would decide on a matter such as that, or anything remotely close to that, at a hearing about the request for an end of the reconstruction. Gee… Wonder what the creditors would say.
ivo 71 said on October 23, 2011
The context indicates that Lofalk meant a ‘going concern’, as opposed to an inactive, bankrupt one.
Ivo
Tripod said on October 23, 2011
Yep. That is an often used expression; but I “safeguarded”
(to avoid the oh so common jibes here at SU) and put it in the other paragraph (even if it can be far from a flourishing businesses, i.e. the other examples in that paragraph) since some might say that there is a bit of accounting terminology in that phrase.
See, for example:
http://encyclopedia.thefreedictionary.com/going+concern
davidgmills said on October 23, 2011
Thanks for the clarification. Sometimes you forget these are translations.
OliverH said on October 23, 2011
Basically GL is pushing the parties that they come out of “stop in nirwana” situation. The one having the money is in a good situation. Youngman/ Pang Da can wait and buy Saab for less money than announced now. SWAN has to sort out how they can be a part in Saab in future, but maybe this is blocking the process. You can’t buy as cheap a now technology “state of the art” as now with Saab.
Sad but true. But looking forward what the future tells. But I miss a mission statement from GL (not this negotiating, liquidity stuff). What does SweGov would like to see (supplier, onpaid debts, ..).
dave said on October 23, 2011
Well, after reading this, one gets the idea that he was only doing his job. He had a deadline and obeyed it.
Nevertheless, I find those conversations with Geely very strange, unless he already knew that the current negotiations weren’t going on the right direction, and the chinese were just expecting things to get worst to make an offer to buy 100% for a much lower price. If that’s the case then he was doing the best for SAAB. If not…
Anyway, SAAB only makes sense to me with a factory in Trollhättan. If my 9-3 won’t come out of there, I won’t buy another one for sure.
Tripod said on October 23, 2011
“… I am guilty as administrator to follow the law and terminate the restoration plan.”
Web-translation?
“guilty”
theSandySaab said on October 23, 2011
guilty, should be obliged by law….
davidgmills said on October 23, 2011
The Australian (?) media is reporting that North Street Capital funded Saab with $10 million yesterday and has promised another $60 million soon. Has anyone heard this or know how reliable this is:
http://www.caradvice.com.au/142566/saab-to-receive-investment-from-north-street-capital-court-administrator-wants-out/
It also says that Lofalk has already rejected the deal as being to small. But none of this seems to square up with Lofalk’s interview.
BoeBoe said on October 23, 2011
Read the official press releases and you know everything:
http://media.saab.com/press-releases
davidgmills said on October 23, 2011
I want to know whether money actually changed hands. The press release mentions nothing about receipt of the money from North Street. A commitment is not money.
Tripod said on October 23, 2011
“It also says that Lofalk has already rejected the deal as being to (sic) small. But none of this seems to square up with Lofalk’s interview.”
“I want to know whether money actually changed hands. The press release mentions nothing about receipt of the money from North Street. A commitment is not money.”
Two comments: First, as mentioned above GL has not enough knowledge about the latest negotiations (with the Chinese or the NSC; even though they (the SWAN/Saab and the administrator) have been keeping each other informed), or he don’t want to tell everything he knows. Secondly: Saab has no obligation to tell the world when they receive something.
davidgmills said on October 23, 2011
Yes but this is good faith money. If it comes as promised it means a lot. If it doesn’t come it means that this investor was not close to legit and GL was right not to give much consideration to anything North Street was offering to do.
Tripod said on October 23, 2011
I agree, and that is one interpretation. Another, as I mentioned in another reply below, could be what an agreement with NSC (about a smaller amount) would lead to, what consequences for the other deals. I.e. there could very well be enough money for the reconstruction period but it complicates the situation with other deals for going out of reconstruction, and going into the future.
aa said on October 23, 2011
The Chinese would like to buy 100% yes but I really don’t think GM will allow that, or in that case no 9-5 and no 9-4x.
mike saunders said on October 23, 2011
This has been said before and I’m afraid that doesn’t make much sense.
Seventy-five percent of the GM’s sale of Saab to Spyker was in Saab stock — those are non-voting shares, so there’s no GM control. Plus Saab is a vendor of GM drivetrains and other key components.
GM has a financial stake in seeing Saab survive.
davidgmills said on October 23, 2011
On the other hand this British article says that the Chinese were willing to offer 700 Euros for Saab and Mueller turned them down:
“We thought North Street Capital was a hedge fund offshoot of General Foods. But the guys over at The Truth about Cars have discovered that North Street Capital is a strange beast, with no real offices, no track record and run by a man – Alex Mascioli – who, it appears, is a shady character, to say the least.
The Administrator for Saab’s Court Protection also says the agreement with North Street Capital to loan Saab $60 million and invest $10 million in shares is so insubstantive as to be worthless.
And then, to put this whole thing to bed, we’re hearing that Pang Da and Youngman have offered to take Saab over lock, stock and barrel for a reputed €700 million. But Victor Muller’s having none of it, hence the Mickey Mouse deal tha
davidgmills said on October 23, 2011
700 Million Euros (sorry for the typo)
davidgmills said on October 23, 2011
If the Chinese are really offering this much for Saab, this changes lots of things. It’s in lots of people’s interests for the reorganization plan to not be approved if Saab is bought for 700 million Euros. Mueller might not like it, but it is a wet dream for GM, EIB, and the Swedish government.
And with that kind of money, the Chinese might even be serious about leaving production in Sweden.
Tripod said on October 23, 2011
Third attempt, since my comment doesn’t appear.
That is old news, sort of, and has been commented here on SU, in other threads, and elsewhere. There was a press release about the new offer, about a direct purchase.
No one knows the actual amount, as far as I know; it’s another thing what they plan to invest in Saab, if they were allowed to buy 100%, and what they offer for a direct purchase.
As for the comment about what the administrator is supposed to have said, in your other comment, and as included in the latest quote from that article about the offer:
I don’t know where they got that from. Remember, the bridge loan, 70 MEUR, was supposed to help the companies during the reconstruction; they have so far got something along the lines of 4.5+4.5+1.5 MUSD, i.e. too little, as mentioned, according to GL in the interview. 70 MUSD (the NSC-thingy) would help during the reconstruction, as 70 MEUR would, but not for a restart.
So if the administrator has indeed commented about the NSC money, I wonder what the comment refereed to. It could be that he thinks that a solution with NSC, for funding of the reconstruction, also means that there must be another solution for the ownership and restart money (not the Chinese one), and since he doesn’t see that, at the moment, he consider the NSC agreement to not be enough. Because in my mind 70 MUSD would be enough for some months of reconstruction. But what do I know; if he indeed has commented.
davidgmills said on October 23, 2011
I know the offer of purchase is old news, but I was referring to the purported price of 700 million Euros. That’s more than twice what GM sold it for and Mueller would be crazy not to take it considering Saab’s condition. I know nothing about this magazine so have no clue whether it is reputable or reliable. But the amount seems far fetched to me. But he also seems to know something about the British company that is attempting to buy Spyker and is competing with North Street for the sale and seems irate that Mueller would consider North Street’s offer, especially since he thinks North Street is not close to being a viable bidder.
Which is why I want to know if North Street’s $10 million was actually funded.
Tripod said on October 23, 2011
Let me rephrase the above regarding GL’s comments on the NSC money; I had read some comments from GL, via some Reuter interview the other day, when the press releases about the NSC money and GL’s letter came.
First, let’s start with the original financing, it is now clear and obvious for all, since some days, that the reasons for him to request the reconstruction to be terminated is a lack funding, It’s in his letter to the court; he has mentioned it in interviews such as the above, and, for example, to Reuter he said
For a reconstruction to work, since you are not allowed to increase your debt, and for him or anyone to accept the role as administrator, there must be adequate funding.
The original financing is the well known bridge loan, 70 MEUR, and I think most would see that as enough for some months of reconstruction, but they seem to have received only some 10-11 MUSD until now and that’s not enough (though it was reported at one point that Saab had told them that they didn’t need all of the loan at once).
Apparently 70 MEUR was enough – since the reconstruction started, and he accepted the role – if it had arrived in larger “chunks”, that is.
Next step. As we know SWAN has said that there will be a 10 MUSD investment and a 60 MUSD loan from NSC to fund the reconstruction of the three Saab companies.
Now comes the interesting part, and why I commented as I did earlier. According to Reuters, same source as above, GL said:
OK, if we believe there is a working deal with NSC, and that the money will arrive; one can wonder about the statement “even that cash was far from enough to keep the reorganization process alive”.
70 MUSD is roughly 460 MSEK
70 MEUR is roughly 640 MSEK, and they have already received some 65-70 MSEK.
So it seems like some 525 (460+65 (already received)) MSEK is “far from enough” but 640 MSEK would be enough for a reconstruction. It’s not a huge difference this early in the reconstruction process. But I know zilch about what is needed, and he is an experienced administrator, so I have to trust him.
Tripod said on October 23, 2011
That is old news, sort of, and has been commented here on SU, in other threads, and elsewhere.
Press release:
http://media.saab.com/press-releases/2011-10-21/ongoing-discussions-pang-da-and-youngman
No one knows the actual amount, as far as I know; it’s another thing what they plan to invest in Saab, if they were allowed to buy 100%.
As for the comment about what the administrator is supposed to have said, as I think is you point with the quote, I don’t know where they got that from. Remember, the bridge loan 70 MUER was supposed to help the companies during the reconstruction; they had so far got something along the lines of 4.5+4.5+1.5 MUSD, as mentioned in the interview. 70 MUSD would definitely help during the reconstruction, but not for a restart. So if the administrator has indeed commented about the NSC money, I wonder what the comment refereed to.
Tripod said on October 23, 2011
Repost; my comment didn’t appear.
That is old news, sort of, and has been commented here on SU, in other threads, and elsewhere.
Press release:
http://media.saab.com/press-releases/2011-10-21/ongoing-discussions-pang-da-and-youngman
No one knows the actual amount, as far as I know; it’s another thing what they plan to invest in Saab, if they were allowed to buy 100%.
As for the comment about what the administrator is supposed to have said, as I think is you point with the quote, I don’t know where they got that from. Remember, the bridge loan 70 MUER was supposed to help the companies during the reconstruction; they had so far got something along the lines of 4.5+4.5+1.5 MUSD, as mentioned in the interview. 70 MUSD would definitely help during the reconstruction, but not for a restart. So if the administrator has indeed commented about the NSC money, I wonder what the comment refereed to.
montahue said on October 23, 2011
Yea, carsuck has the scope
Tripod said on October 23, 2011
Que?
davidgmills said on October 23, 2011
Guess you don’t think much of this magazine or its source.
Presic said on October 23, 2011
700M Euro, I do not believe it.
Victor and his friends jointly did not pay this much money over the past one-and-a-half-year into SAAB. Sure, the ECB loan has to come out of this amount and the suppliers, but it seems it makes a solid payday for VM.
I do not thing the offer is 700M cash, to buy out the current shareholders. I am sure VM would have taken it if it means guaranteed survival of SAAB.
At least, this is what I believe, how we have come to know VM: SAAB first…
Rune said on October 23, 2011
700 million Euro is quite a lot more than the current (or the highest noted) market cap of SWAN.
The easiest explanation:
1) SAAB is not Victor’s to sell (ownership clauses in GM’s contract)
– and / or -
2) The offer is much, much, much less (closer to €1 than €1 million)
ivo 71 said on October 23, 2011
A lady from Y/PD top management (same surname as both owners; was it Irene Pang?) told the media a while ago that after Y/PD had gained control of Saab, the group would be prepared to invest a sum of this order (cannot remember exactly) in Saab over the next several years. A day later, her dad (or uncle or whatever) came out and said that that was a premature statement and shouldn’t be seen as a tangible commitment.
These are Chinese business methods. It costs nothing and constitutes no real commitment to publicly declare your willingness to invest a lot of money in order to gain a better negotiating position. Transferring real money does and that’s exactly what Youngman didn’t do. I don’t have a lot of confidence in Y/PD saying they would invest 700 million if only they can buy 100% of Saab. What I do think is that they just promise mountains of gold tomorrow to gullible western kwai-lo’s (google that one) to gain control of Saab for next to nothing. Good and normal business from their POV, less than a 100% moral perhaps from where we stand. But I don’t think they really care all that much about our offended feelings. It’s the end result that counts. Not all that different actually from our own business methods, these days, if you think about it. Bah.
Ivo
Örjan said on October 23, 2011
They where willing to invest €700M in SAAB and not to pay €700M for it. Probably SWAN would have received more like €1. Would that be a good deal? €1 for the Chinese to move SAAB from Trollhättan to China.
mnztr said on October 23, 2011
Based on this interview I must say my impression of Guy Lofalk is 100% professional. He is doing his job, and is doing his best. I also agree 100% with him. Buying SAAB post bankruptcy will HUGELY diminish the value.. I think VM needs to let go, trying to maintain control in this situation is really not viable. He should agree to a minority ownership with a hefty put option if he cannot work with the Chinese.
Ken H said on October 23, 2011
Was it also his legal duty to mess up the October salaries?
What about the Geely connection? And the misery meeting in Stockholm? The swedgov connections? How convenient he did not have to talk about all these things…
RS said on October 23, 2011
I wonder which one came first. The meeting with Geely or PangDa/Youngman at the NDRC offices?
The initial rumor had it that GL went to China to tell PD/Y they shouldn’t send the money to Saab.
Then head of Geely turns up in Stockholm with a 50 million euro check in his back pocket but walks away when AB doesn’t show up…
Now GL is saying he has no idea why the PD/Y money hasn’t arrived but wishes VM can renegotiate a deal? Is it now okay for SWAN to own (a part of) Saab Automobile?
I just hate it when politics interfere with business. Saab at this point is 100% controlled by the Govt both in Swe and China. Not to mention EIB and GM. Talking about windmills right there.
Rune said on October 23, 2011
I do not think he messed with the October salary payout. He seems to have asked for a clarification of how much (of October) the state salary fund were willing to cover.
Sadim said on October 23, 2011
Quite clearly he knows what he’s talking about. I am also quite sure he has no hidden agenda.
I have a dream. Pangda/Y’man take over 100 and appoint Martin Larsson CEO. Muller can go back to yachting and doing to himself what he seems to have done to SAAB for the last year or so.
Tripod said on October 23, 2011
As an administrator he ought to know what he’s talking about. And the interview did not bring up any controversial issues.
There is a lack of funding, or at least was (since we don’t know about the NSC thing); there have been disagreements between SWAN/Saab and the Chinese investors about the obligations for the bridge loan deal; this we know, and he only answers some questions.
As for Y, I’m not so sure at the moment; if they only are after the tech, then it wouldn’t be good (then one can discuss, and that has been done in other threads, how much tech there is in Saab). Anyhow, the interview didn’t add much substance.
Sadim said on October 23, 2011
Well, what I was trying to say was that all suggestions that he has his own (or some other body’s) agenda and that he makes mistakes and is generally out of order, seem totally uncalled for.
We have seen little of NSC, in fact there is very little to see. No track-record, no office, no web-site etc. My feeling is that we within a few weeks can add no money to that list. I think it is just another Endeavor. As Lofalk said, there exists no REAL agreement between SWAN and NSC. Whats more SAAB is not alowed to increase debt during reconstruction, and after reconstruction any cash comin in can be grabbed by “Kronofogden”, I think.
So, it’s up to Muller to eat his losses and give SAAb a proper chance to survive. That is IF he loves SAAB as much as he says. Remember the account, known as the Judgment of Solomon? Two women came before Solomon to resolve a quarrel over which was the true mother of a baby. When Solomon suggests dividing the living child in two with a sword, the true mother is revealed to him as she is willing to give up her child rather than see the baby killed. Solomon then declares the woman who shows compassion to be the true mother, and gives the baby to he.
Muller, be a good boy and give it up!
TTAero said on October 23, 2011
Why, in the name of (you pic a name) whould the man give up on something he believes in?
Why?
SWAN and the y/Pd had a deal, now they did not pay up and put SWAN and SAAB in an even worse position. Now, when they think they are the only one left, the want to strike a better deal.
If I was the owner, I wouln’t give in if there was a chance.
Patrik B said on October 23, 2011
I think that what some of us are feeling is that VM is risking the future of Saab by rejecting all solutions that don’t involve him.
But on the other hand; all this might just be negotiating tactics…
Sadim said on October 23, 2011
TTAero October 23, 2011 at 15:14
Y&P didn’t pay up because they did not feel that SWAN had lived up to their part of the contract, if I am not mistaken.
Who is to blame for the deal not being water tight we do not know. To me it seems that once too often Muller cuts “deals” that later prove not to come through.
I have not read the fine print of the Y&P deal and I have not heard of any detailed reasons for stopping payments. At this time we cannot blame the Chinese, or do we know for sure why they didn’t pay up? Maybe you know?
Khrisdk said on October 23, 2011
Two things:
VM is risking the future of Saab.
But just as we do not know why the chinese didn’t pay, we do not know the reasons behind Saabs decision not to accept the deal suggested by the chinese.
In the end those two parties are on this situation together.
They will have too find a solution together or Saab will die.
Which is what lofalk said.
Sadim said on October 23, 2011
Khrisdk October 23, 2011 at 16:39
I fully agree.
fido said on October 23, 2011
I think Youngman just don’t trust Mr. Muller. He promised too much, too little to achieve.
At April, production line stopped, he promised to employs bring them out from that situation and never let it happen again, but he failed, and no money to pay salaries, then he call Youngman/Pang Da help,
after they sent money as prepaid for cars, the production line still can’t resume, at that time, i think VM must promised them for production. but he failed again. then Youngman send money agian!
I think chinese just has interest in SAAB, not SWAN, and the structure of SWAN too complex to them.
They just wan to direct inject to SAAB. because they want to invest 700M euro, and Mr. Muller no money to follow up. the % of Muller in SWAN will be very small.
so they just want make things simple, get rid of SWAN, direct buy SAAB. The most important reason is they will get both Gov support for 100% own SAAB.
I think the things just wrong from the very beginning, Mr. VM just like a gambler.
Yes, a small company like Spyker can buy a Big company like SAAB at right time with right price, but without billions in his pocket, he can’t run the Big company.
He put all bets on VA in. when VA can’t in, he’s plan is over.
Every time he get money from others, he just sold SAAB’s assets, the factory, the UK building. the phoenix IP.
sometimes i think the deal between SWAN & Chinese is not fair for Chinese, how much money SWAN
gave to GM to take over SAAB? 74M USD cash & 326M usd SAAB’s share. but Youngman/Pand Da would pay 245M euro for 53.9% of SWAN.
TTAero said on October 23, 2011
You might be right, but if they want to get 100% of SAAB, they do need VM approval, and if I was that man I wouldn’t be happy if a signed deal is out and now being offered peanuts after the buyers drag their feets just to put the other part in a bad spot.
I would do what ever I could to save what I believe in. We, sitting way out of information is banning the man who got all the information, has proven his tenacity and his excellent record in getting people engaged.
He tirelessly seeks for the funding needed. But his work hasn’t been easy since so many parties needs to approve. Still he did get this deal signed, everyone was happy, but now, someone drags their feet. And the only one getting hurt by this is SAAB and SWAN.
I’m not a fan defending VM every move, but at this time I really can’t see a better leader. A leader that doesn’t jump ship when there is a storm rocking the boot.
If VM really can make a deal with someone else in this short time (we doesn’t know when this plan B, C or D was first engaged) I am giving VM my applause. You do what you think is appropriate.
Marque said on October 23, 2011
another indolent concept – ‘give it up’. WHY are you concentrating so much on Victor, and why so imponderable concerning the main subject, Saab namely?
What is your aim by begging Muller to give up? Do you care what’s up there with Saab after he gave it up (to the void)? Do you know or care, who’s gonna be willing to take it over, invest, operate etc. Who is it? How much is he investing? Where does he maintain operation of SAAB in the future?? And the bonus question, why will it be better with him than with Victor, so really, what is the point?
Peter, Sweden said on October 23, 2011
“The token offer was unacceptable because it would trigger every conceivable change of control clause and that would possibly mean the end of Saab,” Swedish Automobile CEO Victor Muller told Reuters in a telephone interview.
Isn’t this reason enough to stand behind Victor’s decision? O_o
fido said on October 23, 2011
@Peter
if 100% is unacceptable, i think the 53,9% also unacceptable.
i think if 100% owned by chinese, ng 9-5, 9-4x, current 9-3 will not been allowed to produce in china.
maybe phoenix platform also need do some adjustments to get rid of GM things.
Khrisdk said on October 23, 2011
Oh yes. I knew that statement, but I didn’t want to bring it up as it is a statement that would probably bring about just as much discussion as the statement from Pang Da/Youngman that the reason they didn’t pay was because of the conditions not being met.
Anyhow:
They need to figure out how to solve this.
Which they probably will in the last minute is my personal assumption.
Saab is still too good to let go down the drain. For all stakeholders
Tripod said on October 24, 2011
Sadim October 23, 2011 at 14:28,
(A long slow Sunday, you (i.e. I) post a little comments here and there, nothing happens, you go away for some hours, and then something happens… a little thread).
I’m not going to comment much because you suddenly bring up a lot of different things; not mentioned in this blog post, not mentioned in your other comment or in my reply to you:
I’m also not sure about the NSC, and I know that GL has commented it; but did Lofalk say that in the interview mentioned above?
I know that, have mentioned it, and hey: it’s the same for all companies, not only Saab.
And most people should know it. And why on earth do you mention it, just like that?
You seem to go on a negative spree like some naysayers in comments to media articles in this comment (“look at this, look at that, and that, and anyhow all is cr*p”).
Of course, we all know that. Same for all at exit reconstruction.
But why mention either obvious things, that all ought to know, or has been mentioned earlier, or things that has nothing to do with my or your earlier comments, or this blog post? OK, all do that, comments OT, but this was an odd reply; why mentiong “’Kronofogden” and “debt” etc. we were talking your comment about GL, not everything in the world.
As I said like some naysayers in comments to media articles: “look at this, look at that, the sky is falling”. Why on earth did you mention “… and after reconstruction any cash comin in can be grabbed by ‘Kronofogden’”? We are not stupid.
ivo 71 said on October 24, 2011
He does have one point, though, imho. A 60-million dollar loan from NSC would increase the debt load of Saab by 60 million, wouldn’t it?
Ivo
jond said on October 23, 2011
As I read it we are clearly now in the endgame. VM/SWAN will not give up control until they are absolutely certain that they cannot generate a better deal for themselves that will satisfy the Administrator. P/Y seem confident that they are the only realistic game in town and so are prepared to offer peanuts to buy Saab from SWAN. (The visit to the NDRC to plead Saab’s case must have reinforced that view in the minds of the Chinese.) After all, they will own various bits of Saab (such as Saab UK) on a bankruptcy in any case and they are effectively saying that they are prepared to wait for the declaration of bankruptcy and then pick up the remaining pieces they need. Presumably they hope that problems like the brand name will be swung their way given their promise of massive investment. The two sides are just taking extreme negotiating positions. The Administrator, in following the letter of his brief, is in effect concentrating minds and setting a deadline for both sides to come to agreement. SWAN must realize that once the Company is declared bankrupt then they will lose all (including VM’s salary), so they might well be minded to accept an offer from P/Y that is revised only slightly upwards. But they will hold out for that until the very last minute. P/Y would also be risking quite a lot. as GL implies, by playing the bankruptcy card and SWAN/VM know this. Either way, by refusing to honour the bridging loan commitment, P/Y is playing a negotiating card to which SWAN/VM have no response given the liquidity situation and their inability to source realistic investment funds from elsewhere.
I read this as very good news. First, it is in both parties’ interests to be realistic and to make a deal once all cards are open to view and probably immediately prior to a bankruptcy. Secondly, it seems rather unlikely to me that the NDRC haven’t already made up their minds to accept the takeover, given that this has involved negotiations at a diplomatic level. Thirdly, the ownership of the company should be resolved soon and there will be no point in delaying investment that will restart production once a new management team is installed. In fact quite the reverse.
It looks to me as though Saab will very shortly have new owners and that there will be a near-term restart of production. At least that’s my guess.
saabyurk said on October 23, 2011
Seems like a very good analysis to me. I think your guess is very likely true.
Trued said on October 23, 2011
jond,
Excellent analysis, lets follow how it all evolves this week.
The issue some people have brought up is the possibility of a future move from Trollhättan if Saab gets chinese owners, but that is not the time to discuss that now. Now it is all about survival. The doomsday clock is ticking.
Lets hope then that GM/US gov, EIB/Swe gov etc. will accept new owner (who that would be) taking over previous agreements signed with SWAN.
–
What would happen if Saab goes belly up?
- Will the government appointed official then try to find a 100% buyer of a complete SAAB, or will the process off selling pieces start right away? Guess the latter is a way straight down into hell.
lala said on October 23, 2011
you mentioning y/pd already getting Saab UK etc. when things go wrong, but they haven’t lived up to the contract in not paying the 70m EUR, so I’m wondering if they are still entitled to that lien….
fido said on October 23, 2011
I have read in the china newspaper, that Mr. Pang Qinghua (Pang Da chairman) told to the reporter he sent 45M euro as prepaid for cars, and SAAB’s building in UK is the collateral. Which building? I don’t known, maybe showroom.
ivo 71 said on October 23, 2011
Saab UK own considerable real estate in central London. I don’t know if it’s worth 45M euro but it certainly does represent a lot of money.
Ivo
Rune said on October 23, 2011
Saab UK is collateral for Pang Da’s order of cars yet to be produced.
Sadim said on October 23, 2011
Right. Good one jond
Some time ago I read a post at TTAC where they envisaged that we would see the Chinese dragging their feet, and having no hurry at all to live up to contractual obligations. I’m not sure I want to say that TTAC were correct, but one gets the feeling that this whole situation might just be part of Y&P’s plan.
davidgmills said on October 23, 2011
I’ve always thought that for the last six months. Ever since then I thought this was just a sophisticated buy-out of Saab by the Chinese that would take the better part of a year.
From Y&P’s point of view, they have already put in some cash and got nothing for it. Mueller couldn’t deliver on his production promise to PangDa (Pang Da probably realized there was a good chance of that) but put up the money anyway to give themselves a very good position in a bankruptcy. If I am the bankruptcy judge I protect Pang Da for attempting to be a savior of Saab. So I make sure that in bankruptcy Pang Da and Youngman (if Youngman put in money too) get a good deal in bankruptcy. Otherwise it sets very bad precedent because companies will be unwilling to help save distressed companies. There has to be an incentive for companies to save other distressed companies.
I think Y&P knew good and well that by putting in money into Saab to attempt to save it would put them in a good position in bankruptcy court. So they can drive a hard bargain now. They can legitimately say they have put up money to save Saab and it makes no sense to put up any more. So they can go into bankruptcy, make a good deal with the creditors and then buy what parts of Saab they really want and let the rest go bye-bye.
TurboLover said on October 23, 2011
Acording to SVD PangDa/Youngman offered 200 milj SEK for Saab Automobile
http://www.svd.se/naringsliv/ratade-budet-pa-saab-200-miljoner-kronor_6575427.svd