There’s been so much reporting in the media in the last 48 hours that there seems to be some confusion about what it is the The Koenigsegg Group wants (i.e. what it is that the Swedish government are saying no to).
The following is my attempt at figuring it out.
The Share Purchase Agreement signed by GM and Koenigsegg states the following:
The stock purchase agreement will be subject to agreed closing conditions. Conditions to close the sale include expected funding commitments with Swedish government support and guarantees, as well as transitional assistance from GM, as Saab becomes independent.
It’s interesting that the mention both support and guarantees in there. The guarantees we know about – they’re the EIB loan guarantees. If Koenigsegg have promised GM that they could get government support (in the form of real money via a bridge loan)……… well, good luck.
Let’s go back in time a little here…..
You might remember that about a week before the Share Purchase Agreement was announced, there was a big panic when someone, believed to be Mark Bishop, decided to leave the Koenigsegg Group. At that time, the Chairman of the K-Segg Group, Augie Fabela, had a meeting with Joran Hagglund.
Hagglund came out of that meeting with two things – supposedly a better idea as to who was involved with the Koenigsegg Group, and secondly, an indication that the Swedish Government might be asked for a loan to fund the business plan.
The Business Plan originally called for around US$1billion in funding, which was to be provided 40% by GM and 60% via the loans from the EIB. It seems Koenigsegg altered the plan, however, and are now calling for around US$1.5billion. It’s believed that Fabela gave Hagglund the heads-up about the extra half-Billion at that meeting.
When the SPA was announced, Christian von Koenigsegg said quite distinctly that he hoped that the shortfall in Saab’s business plan would be funded equally by GM, Koenigsegg and the Swedish government.
From TTELA with Googletrans:
…..the financing was a source of many questions in Saab and Koenigsegg met the media at bilmuseet yesterday. Currently states namely Koenigsegg, although EIB loan becomes clear, miss three billion kronor to realize its business plan for Saab.
Christian von Koenigsegg, CEO of Koenigsegg Group, believes that Koenigsegg Group, GM and the Swedish government have a responsibility to solve it.
– Saab now has a good solvency normally provided opportunities for bank loans for this part, but when the financial market looks like it does, it is not really possible, “says von Koenigsegg.
Therefore he wants state help to obtain a loan on commercial terms. His argument is that there is an interest to find a solution for Saab, and that other governments have acted differently.
That shortfall, reported earlier at US$500mil is now being reported in Swedish circles, as SEK3Billion, which is closer to US$400mil.
Koenigsegg are said to be putting in around SEK720m themselves. I haven’t heard where or not GM is coming to the party for around a third, and I believe that what Koenigsegg is seeking from the Swedish government is finance in the form of a bridging loan at commercial rates on the remainder.
It’s this amount, this bridge-loan that they’re seeking, that seems to be the point of so much contention. By my calculations, it should be around the US$130million mark (or 931million of Sweden’s finest).
This is just my own deductive work from the reports we’ve been seeing.
It is unknown how much of the shortfall Koenigsegg want a guarantee for, but if it’s one third of the amount they need for their business plan, then it doesn’t seem (relatively speaking) like that much.
Still, the government remains stubborn, perhaps on the grounds that they’ll be asked to lend more than what the owners are putting in themselves. Maybe if Augie Fabela steps in, he is not currently an owner in The Koenigsegg Group and therefore has not contributed any capital himself, the scales might tip in their favour.