Swedish Automobile Issues Subscription Notice Under GEM Facility
Trollhättan, Sweden: Swedish Automobile N.V. (Swan) announces today that it issued a subscription notice for 4 million shares under the current EUR 150 million equity facility between Swan and GEM Global Yield Fund Limited. The exact number of shares to be issued and the price thereof will depend on the pricing period which commences today.
Swan and Saab Automobile AB continue their discussions with parties to obtain further short-term funding to be able to restart and sustain production.
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SU commentary: To me this is a plan B. It looks like Saab is taking measures to be able to pay the August wages, just in case plan A can’t be fulfilled fast enough.
This is my personal assumption and not a fact.
Whatever we might think about this, it shows that GEM believes in Saab`s survival.
I don’t think it does; my understanding of the deal is that, under the contract, GEM is compelled to buy the shares. The higher the risk (as reflected in a low share price), the lower the price paid per share.
Yes but they buy shares which are worthless if Saab goes under? Sorry if I have understood this wrong…
GEM immediately sells the shares. They also get a huge discount on them.
And because the price they have to pay is based on the price at the end of a trading day they dump a lot of shares on the market at the end of each trading day. In that way they have to pay less and make a bigger profit.
@BoeBoe
SWAN is a very very thinly traded stock. Especially with the current news and uncertainty, i find it extremely unlikely (probably impossible) that GEM would be able to dump 4 million shares in the same trading day. I would also be somewhat surprised if there weren’t some type of hold clause and some type of “dumping” restriction in the agreement.
Not that thinly traded, 2.75 million shares traded today out of a total number of 18.48 million, SWAN shares regularly trade at more the 1.5 million in a day, the day traders seem make a good living out of Saab’s predicament! 4 million shares could be moved in around a week!
How many shares does SWAN have to issue to GEM before EIB gets involved on an ownership question? Can VA (or somebody else) quietly buy up GEM’s stake?
I’ve said it before, but I take my hat off to VM for having secured this deal with GEM. I’m sure GEM don’t like it, but basically this is a get-out-of-jail-free card for VM. It is expensive, certainly, but it is a brilliant deal to have as a backstop.
No it can’t.
I don’t remember well the percentage, but if somebody reaches a certain ownership percentage, the EIB, GM,SweGov must approve that party.
it was my understanding from fellow commenters here on this site that GEM is probably not keeping the shares but onsells these straight away. I recall that someone posted an interesting theory how these type of investments work. If this is the case GEM’s stake would not increase.
And hopefully as RedJ says, ther is a Plan ‘A’ progressing in the background – this is obviously a very short-term solution to day-to-day cash problem, but not dealing with supplier issues.
Red J, I think its 9%
I thought it was every 5% change.
At least this shows that VM and Saab have not given up! 🙂
Hoping for a plan A – and a real, stable solution to come soon, so production can restart and confidence be rebuild … 🙂
Unless the whole organization is geared to start production on the 29th I fear this is a futile gesture. Yes it is great that VM secures funds for salaries and wages but I don’t think they can afford to dealy production by a single day.
It is crunch time Saab. Saab UP!
The lender of last resort!
If it`s necessary to use the GEM facility to pay August salaries, how are earth can production re-start week 35?
(Grumpy, we may have to crack a bottle of Malt to commiserate or celebrate, SAAB up!)
Lets hope that this is the last of the GEM funding exercises and that they get a proper investor on-board in the next couple of weeks, though who would want to is the big question?
If they want to use GEM to pay the August salaries they will need to issue a lot more shares.
The salaries are 11 million Euro and if we assume that the shareprice stays around 1 euro they will need to issue at least 12,5 million shares to GEM. Don’t forget that GEM gets a huge discount on the shares they buy.
BoeBoe,
maybe they only need 3 mill EUR to pay the wages in full. I can’t believe that they would be allowed to pay only A-M 😉
And where would the rest of the money magically come from?
Maybe its already there.
Boe, I don’t know how much or less money is in Saab accounts, do you?
I’m only making an assumption as well as you do, therefore both are valid.
True, but we may assume that there is currently (almost) no money is Saab’s accounts. The only (publicaly) known inflow of cash is the money from GEM. If Saab got a substantial amount of money from another source they would be so smart to tell everybody 😉
I guess it will be used to pay the suppliers that turned to the Kronofogden and that have to be paid somewhere this week.
Your point.
Forgot about that, and yes, it makes more sense.
DI points out that this may be a way to let in Antonov through the back door, since GEM is free to sell their Saab shares to whoever they like.
I think that’s one for BoeBoe to answer
Thank you
Ijust wanted someone not tainted by too much enthusiasm to point out that Di.se, theat great swedish industry newspaper don’t have a clue, and just for good measure that they made the same mistake last time
Does anybody know how is now the actual proportioning of all shares of SWAN ?
http://www.afm.nl and search for Swedish Automobile.
http://inside.saab.com/saab-decision-on-frankfurt-motor-show/
Sadly…but I expected this cause it was tooo quiet about the possible presence in Frankfurt the last weeks. However another missed “yes, we are still here”-chance for possible customers.
kaiger,
don’t take it personally, but I now, If Saab would have appeared at Frankfurt under the current financial situation many would have said that it is a waste of money Saab doesn’t have.
I agree 100% with what is written in “SU commentary” lines after the post.