Press Release: Saab Secures Short Term Funding

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The new loan facility was made through Gemini Investment Fund (not to be confused with Genii Group or GEM Global Yield Fund Limited) for €30 million. This loan clears the way for production to start in a week, news that SaabsUnited broke over the weekend first.

To all those who wanted yet another apology from Victor and a new tone, I think you’ll be pleased as well. He’s working incredibly hard and doing a tough job getting Saab through this period. Congratulations to the Saab team. On to long-term financing…

Update: From Victor through email: 🙂 we never give up!

Indeed Victor, that’s why we have faith in you and your team.

_____________________

Trollhättan, Sweden: Spyker Cars N.V. (Spyker) announces that it secured the short-term funding of Saab Automobile AB (Saab Automobile) by entering into a EUR 30 million convertible loan agreement with Gemini Investment Fund Limited (Gemini).

Spyker entered into a EUR 30 million convertible loan agreement with Gemini with a 6 months maturity. The interest rate of the loan is 7% per annual and the conversion price is EUR 4.88 per share.

In addition to the receipt of EUR 30 million from Gemini, Saab Automobile will make a drawdown request to the EIB for an amount of EUR 29.1 million. As a result of the convertible loan and the EIB draw down – which is expected next week – Saab Automobile secured an amount of EUR 59.1 million. With the receipt of these funds, Saab Automobile secured the liquidity that is required to restart production.

Saab Automobile aims to restart production within a week, pending agreements on delivery schedules with its suppliers. In order to improve lead times to customers and dealers on existing and future orders, Saab Automobile will work together with its suppliers to minimize any impact from the recent production stop.

Spyker and Saab Automobile continue to work on securing medium and long term funding.

Victor Muller, CEO of Spyker and Chairman of Saab Automobile said: “I would like to apologize to our dedicated employees, suppliers, dealers and customers for the disruptions of the past weeks. We will do everything in our power to restore the confidence in our company as soon as practically possible.”

 

Note to Editors:

Saab, or Svenska Aeroplan Aktiebolaget (Swedish Aircraft Company), was founded in 1937 as an aircraft manufacturer and revealed its first prototype passenger car 10 years later after the formation of the Saab Car Division. In 1990, Saab Automobile AB was created as a separate company, jointly owned by the Saab Scania Group and General Motors, and became a wholly-owned GM subsidiary in 2000. In February 2010, Spyker Cars N.V. of the Netherlands, acquired the company from GM as an independently-run business.

Saab cars reflect the brand’s unique Scandinavian design ethic, which is fused with its aircraft engineering heritage. The company is a global premium car maker with a distinguished history of innovation. It is recognized for its pioneering role in turbocharging, as well as occupant safety and the introduction of flex-fuel technology through Saab BioPower. Saab Automobile AB currently employs approximately 3,800 staff in Sweden, where it operates world-class production and technical development facilities at its headquarters in Trollhättan, 70 km north of Gothenburg.

53 thoughts on “Press Release: Saab Secures Short Term Funding”

  3. Finally! 😀
    Now we hope that Mr. Antonov soon will be approved by the EIB and the Swedish Government so that the medium-term funding also will be secured. 🙂

  4. I’m usually over-optimistic, but I can’t really see what is so amazingly awesome this time around — they’ve secured just another loan. I’m sorry, but I can’t see how hard it can be to borrow money? Hopefully it might be just a quick-solution until the Chinese negotiations finalizes into real Saab-money, but it could also be just another loan which will be all too hard to pay back, all too soon…

    Enough negativism! Now waiting for some relief about the long-term funding!

    And nonetheless — great news! Fingers crossed that I’ll own a NG9-3 in 16 months! 😀

  5. Stay of execution for 6 months. Six months is pretty short to iron out a solid long term solution. This solid long term solution has to provide the funds to pay back Gemini within those 6 months. Another 6 months hitting F5?

    • I don’t think it will be a problem. Discussions with a Chinese partner seems to make progress and I am pretty sure that in six months both Mr. Vladimir Antonov and some Chinese company will be shareholders and financiers of Saab through Swedish Automobile NV (which Spyker Cars NV will be renamed to on May 19th). Six months should be more than enough even for the EIB to decide on new shareholders (who apparently exists)… 😉

  6. Peter is right – the GEM facility was agreed upon as a last-resort financing solution long ago, I believe back when the sale was completed. It was described in Spyker’s annual report. It is my understanding that what happened was the operational decision to draw from it. I also hope that despite all the acrimony between VA’s team and EIB, as well as suppliers asking for official debt execution, EIB will let Saab draw from their facility as well.

    It’s the last stretch and the endgame now. There is no more room for missteps, delays and excuses. There is no more room for business as usual. Many people in Saab might have been working in overdrive and overtime (with VM reportedly continuing on his hectic schedule), but apprently their effort mas misdirected. It’s time for Saab to fire on all cylinders, full throttle, turbo gauge to the limit, as an entire organization, not just individuals chasing karoshi.

    Something was going terribly wrong at Saab up until now, and I hope this changes once and for all.

    • The main thing that went wrong is that the sales numbers were very disappointing. The ‘business as usual’ over the last year was mostly a continuing cranking back of sales forecasts. No criticism here, I expected that it would take a couple of years to carve out a Saab niche again. But you’re right, there is an end to plugging holes with holes, selling goods and your mother-in-law. A long term solution has to be found within the next couple of months, otherwise it’s curtain time.

      • Saab doesn’t have the few years now. Saab has been in a “niche” of 90-120K cars for years now, there’s nothing to carve here, just fill it in! Numbers didn’t go wrong, numbers don’t work for Saab clocking in and out of Trollhattan everyday. People do. And some of them surely didn’t do their homework, and it goes up from the very bottom to the very top.

        But you’re right, the problem is on the sales side, not the financing side. With a good few months of sales, Saab doesn’t really need any more financing. I truly mean it. And Saab can sell 90-120K cars a year, and they can still sell 80K this year. This is not an impossible target if they focus on THAT rather than constantly trying to figure out financing. It’s time for VM’s “impossible is nothing” mojo to come to the sales & marketing dep’t.

    • Not to get even more confusing, but GEM and Gemini Investment Fund are two different funds I believe…

      The GEM credit line could have been extended a lot more, but the terms were worse. This one has much better terms. It is the endgame though, and Saab has to get all it’s ducks lined up. 2011 will go down as the organizational year. I hope they clear all the dead brush they can, lean it out, and keep lining up their investors.

      • I think you are correct, Jeff. Gemini I.F. is headquartered in the Bahamas. A few pointers:

        1. I am quoting from their website: “Initial FREE personal consultation either in London, Moscow, Baltic States“. The missing word ‘or’ is typical for a Russian speaker, as are other slips of the pen on the website, so I guess one wrote the content of that website.

        2. Also, Gemini I.F. already owns 11,9% of the Spyker share capital. Anyone can find that info since Spyker is a public company trading in Amsterdam.

        3. Finally, Gemini recently acquired a minority share of the Latvijas Krajbank from majority shareholder Snoras Bank (per July 2011 100%) who, in turn, acquired the shares from its parent called Convers Group.

        Okay, so who lives in or near London and has businesses in Moscow and the Baltic states? Who effectively owns and/or controls Latvijas Krajbanka and Snoras Bank and the Convers group? Could it, perhaps, be that that same person has, directly or indirectly, something to do with the Gemini Investment Fund? I don’t know that, that’s the nice thing about Bahamian investment vehicles but let me make a wild guess: after these 6 months are gone, Gemini IF is not going to insist on the repayment of the loan. And another: there will be a majority shareholder in Spyker/.Saab who lives around London and maintains offices in Moscow and the Baltic states. No idea though who that person may turn out to be 🙂 .

        Ivo

        • OK, so let’s add up the share numbers. Existing 11.9%, another 30M Euro above the table, 30M through a Bahama vehicle, that must add up to something like 60% of the Spyker shares? Who is this proud new owner of Spyker/Saab?

          • Those appr. 30 mio above the table represent 29,9% of Spyker. Plus 11,9 makes 41,8% Plus 30 mio via the Bahamas route is another 29%, if the same share value applies as to the ‘above the table’ transaction. Grand total: a little over 70%. I really have no idea, Gerrit 😉 .

            Ivo

          • Gerrit,
            30M € + 3.5% of the interest rate at a conversion value of 4.88€ per share equals to 6,362,705 shares.

            From the Spyker site

            Number of issued shares per 7 April 2011
            Ordinary shares: 17,482,657
            Shares class A: 5,818,889
            Total number of shares issued: 23,301,546

            The credit represents “only” 27.3% of the Spyker shares.

          • @ivo 71: I think it’s 29% in total. Having 30% or more share would mean they also have to make a public offer for all shares.

          • @ Tim: so what makes you think they won’t? If VA is actually the person behind Gemini then that’s the way for him to achieve exactly what he wants: control of Saab. And he could sell his shares to Gemini and make a nice book loss for taxation purposes if he wanted to. Or the other way round.

            Ivo

          • This is going to raise some eyebrows at the Amsterdam stock exchange. I wonder if they are considering this to be a legit transaction.

          • Gemini has a share of 8,11% and not 11,7%! Check the website of the Duth AFM (Authority Financial Markets) they are the only correct source.

            At the moment Gemini owns 1.889.525 shares at the moment and if they convert the loan into shares they will have an extra 6.147.541 shares which gives them a total of 8.037.066 while there will be 29.449.087 outstanding shares in total.

            This will mean that Gemini will have 27,29% of the shares in Spyker Cars NV.

            PS If Gemini is indeed Antonov I think GM, the EIB and Swedish government will be pissed off…

  8. This is of course a good news, but I am waiting for another, even better news from China! Cooperation, or even a part ownership with a Chinese company provides financial muscle for developing new 9-3 in time and brings back the confidence in SAAB, which is, I think, crucial after the PR disaster with the production stoppage.
    VM and JAJ bring us some good news and do it quickly!

  9. This has not been on the internet yet, and it might have been addressed in other comments, but according to DI, there are two facts that affects the SAAB independence;
    1. The negotiations with Great Wall is ended and are continuing with another (un-named) Chinese partner, of which is described as (even) better to work with.
    2. GM has offered SAAB that if they pay back the amount they “borrowed” from GM, they would get a rebate of up to 800 MSEK.
    Thus, considering the collateral that SAAB possesses;
    * SAAB spares 5 000 MSEK
    * SAAB facilities 1 000 MSEK
    * SAAB Phoenix platform and eAAM involvement 1 500 MSEK (and increasing by the minute).
    * SAAB Equipment for 9-3 and 9-5 1 500 MSEK
    The collateral should be up to 9 000 MSEK (low valued).

    The debts;
    * EIB 2 100 MSEK (with the latest asking for money)
    * Gemini 270 MSEK
    * GM 2 400 MSEK
    * Suppliers > 300 MSEK
    This sums up to 5 100 MSEK, but 4 300 MSEK after GM rebate.
    In addition, SAAB would need some 3 000 MSEK to finalize work with 9-3 and other obligations before they could be profitable again. Still below the 9 000 MSEK collateral.

    • Great analysis, thanks! Can somebody from the editorial team vet this please, and publish in the front page, while the rest of us could forward the link to the media et. al.?

    • There are other debts, UWb. For instance, GEM Funds for €25 million, Pieter Hereema for €24 million, etc.

      With regards to GEM, here’s the details from way back in January ’10:

      As back-up financing, Spyker entered into a EUR 150 million Equity Credit Line Facility with GEM Global Yield Fund Limited (“GEM”) for a term of 3 years. According to this facility, Spyker may issue shares to GEM at 90 per cent of the volume weighted average price of the shares over a period of 15 trading days following a draw down notice sent to GEM by Spyker. In relation to the GEM facility, Spyker has issued to GEM share warrants in respect of 1,570,000 ordinary shares at an exercise price of EUR 4 per ordinary share. The warrants have a 5 year term.

      So as BoeBoe said, it’s all in the annual report, and I don’t think the armchair analysis from our side is going to do much good at this point. I can’t even imagine all of the projections, business plans, contingencies, and the like floating around Victor’s briefcase right now. I repeat– I don’t believe there’s anyone else who could have been capable of pulling this off and giving a damn as much as Victor Muller. The man is a saint for Saab. If he’s guilty of anything, it’s not following through and stepping on as many toes at Saab in the past year to make sure the business plan stayed on track. If there’s anything good that could have come from this crisis it’s that it allows him to implement the new business plan in the most direct and forthright way that he can. Quickly I hope.

    • They have said that they are working on it, but they won’t tell us more until everything is finished due to banking secrecy.

  12. It seems as the process of getting V A onboard is delayed / take so long time that other stop-gap measures have to be considered.

    Just the other week there were rumorours that SAAB would like to cancel the EIB loans but on terms that VA was allowed into the company as an owner and financer.

    And if SAAB want to change the the collateral for the already approved EIB loans, in order to
    free capital in a lease-rent back of their production porperties, the EIB answered by cancellation of the loan and forced repayment within 90 days. …

    7% interest on the loan from Gemini Investment fund is probably on the high side, SAAB:s financial predicament takes its toll.

    So to conclude – VA is not involved in the latest short term refinancing?

    And the long term funding plan is yet to be confirmed?

    Can only hope that there will be a medium and long term recapitalization aswell – because the EUR 59,1 million discussed is basically a 90-120 day cash injection only.
    And the EIB part is tied to development projects and research that does not give SAAB a return on investment for many days to come.

    Also SAAB must keep their staff, customers, suppliers and vendors well informed and motivated-
    it would be devastating if key-staff among the engineering dept and development teams lost their spirit and decide to leave the company, just as among the key suppliers and the vendors.

    SAAB need to improve their line of communication and attitude towards information and support their dependants and suppliers in a better way.

    Well – still hoping and longing for amicable medium and long term financing and also hope that
    the production line can get up and running the next week.

    Not only have the production stoppage cost a lot of money the past month, the sales and orders on hold will cost more money aswell come the next months.

    Sharing / selling future products and know-how to an Chinese investor – under marketable terms and giving access to the expanding chinese market makes sense in many ways.

    As always hoping for the best and some stability for the hard pressed team at SAAB, their employees, suppliers and retailers.

    • Well, according to research done by Fröberg at SvD Gemini is connected to VA so the 7% and possible converted shares goes to a good cause! Not even EIB can blame them given the situation with EIB sleeping while Saabs rear is against the wall.

      • Thanks – just found the SVD piece confirming the VA connection to Gemini.

        A persistant man that Mr Antonov ! 🙂

        This offcourse buying SAAB valuable time for a more long term solution.

        So VA enters as partowner of SAAB and a possible chinese investor buys/ license
        know-how and technology from SAAB – seems to be the plan B.

  13. i am still awaiting the arrival of the efficient streamlined independant Saab, communication via the national distribution centres has been non existent, loyal customers…potential customers are left in the dark, Australian prices are steep…[a base 9-3ss petrol is the same price as a base Freelander 2 diesel], difficult to sign that cheque….

  16. Everybody’s (?) now happy with this short term conclusion but I sincerely hope that the employees have also received their salary and that there won’t/hasn’t been any delays with the salary payments. Even though one might be infatuated with SAAB, that’s not gonna feed the employees & their families.

    • We haven’t heard of salaries not being paid, and Saab does have cash on hand to pay certain bills (now more to get them through a little longer).

  18. Boy it takes a lot to cheer you guys up! Good news and key thing is that production is going to start up – very important!

    I don’t care who owns what percetage of what – we need to get Saab up and running again , money is money!

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