What a 24 hours we’ve had!
Things have moved to another level all together. I thought I’d whip up this summary entry to gather together all the various bits of news, the reactions and things we’re possibly still a little unhappy about.
Koenigsegg have signed a Stock Purchase Agreement with General Motors to take Saab Automobile off GM’s hands. The details of the deal were not disclosed in the press release from GM, but several Swedish media sources claim knowledge of the deal.
I’ve not taken all the sources for this summary, as I believe some of them (*cough*bloomberg*cough*) are smoking some wackyweed.
The press release merely states that the deal is conditional upon some funding being provided in different ways – via support and guarantees from the government, transitional funding from GM, etc.
Basically, there wasn’t much, if anything, we didn’t know already.
The Swedish media had more juicy stuff, however.
– The price tag is basically zero, but GM has an agreement that allows them some profit if Koenigsegg can manage to get Saab back on its feet, says a person close to Saab.
Koenigsegg will receive a lot when the company takes over Saab Automobile, among others things:
GM will give up three quarters of Saab’s debts, or 750 million dollars.
Koenigsegg get the rights to produce the next generation of Saabs (i.e. 9-5 variants and 9-4x) for free. The value of this right is by analyst DN Ekonomi talked to estimated to around 2 billion dollars.
Saab will not have to pay back the money that GM supported Saab with during this years reconstruction.
Machinery and equipment required to manufacture the Saabs will be transferred to the company.
Some of the sources are saying that the Koenigsegg Group are putting in $100m. Others are saying that they still need another US$400m, which they’ll have to source from outside as it seems the Swedish Government won’t support them with a loan and the EIB money can only be used for green technology stuff.
Some reports stated that GM would retain a minority stake in stake in Saab, possibly in the form of preferential shares with limited voting power but retaining dividend rights if and when Saab are successful. Both the press release and a report from DI.se disprove this, stating that Saab will be sold 100% to the Koenigsegg Group.
Saab, as was thought earlier in the week, will exit reconstruction this week as part of their progression towards new ownership.
I was informed last night that there would be an interview with Augie Fabela (the K-Segg Group Chairman) in the Swedish news today.
That hasn’t appeared online yet, though it may be in the print media. Hopefully something will be forthcoming soon as I’m sure this interview will address some of the stuff we’ve been interested in for some time, about the group and their plans for Saab.
Jan-Ake Jonsson and Christian Von Koenigsegg appeared in a video shown at GM Europe TV and in that, they addressed what this latest signing means, whether there’s adequate funding, who the Koenigsegg Group are, etc.
Whilst they did touch on those subjects, it must be said that it was a scripted event, without a chance for press questions.
Still, it was good, and reassuring, to hear something from the top.
This day has been a long time coming and whilst it’s possible that you could still be a little frustrated by the timidity of the whole event, the significance of Saab and Koenigsegg getting this far should not be underestimated.
Of course, the Swedish press are underestimating it somewhat, with the repeated calls for Koenigsegg Group to ‘show them the money’. Commenters note the view from the press that all that’s happened here is another piece of paper has been signed.
That may be true, but I get the feeling that there’s been a truckload of stuff to get through prior to this being signed. As I said, it’s a significant moment. The due diligence is done, the plans are made, the belief is formed and the players have now committed to the purchase.
Jöran Hägglund, the Secretary of the Industry Ministry, and the man dealing with this whole affair from the Government’s point of view, outlines four more things that have to happen:
- Koenigsegg must add (or disclose) more private capital
- They have to get through the EIB loan process
- They have to get through negotiations with the government on guarantees for those EIB loans, and finally….
- The EU Commission has to approve those loans.
If they can line those particular ducks in a row, then we might have something to work with here.
Analyst Matts Carlsson states that the SPA being signed today puts some pressure on the government to provide the loan guarantees. If the companies have satisfied each other well enough to get to this point, then the government should perhaps do a little more to come to the party and be more of an enabler for the sake of Swedish industry (that’s my take on it, at least).