I know we are about to set a new record on posts per day, but I feel like having to talk about this, as most of the people when reading the financial report seems to only concentrate on the losses of €(201.5) million.
On pages 21-22 on Chapter 16. the report talks about related partner transactions. And it illustrates very well how much money Saab gets or pays to certain third parties for services delivered or obtained from those.
One of this partners is e-AAM who buys services from Saab and also the other way around.
During the period ended 30 June 2011 e-AAM purchased services from the Group for an amount of € 0.5 million and the Group purchased services from e-AAM for an amount of € 0.3 million. At 30 June 2011 the Group had a net receivable of € 0.1 million from e-AAM.
Yes, Saab has earned €100,000 from e-AAM in the first half of 2011, which is quite interesting.
But the most interesting third party is GM.
At Closing, GM converted $ 326 million (about € 228.7 million) of pre-closing receivables on Saab Automobile into redeemable preference shares (RPSs) in Saab Automobile. The voting rights attaching to these RPSs constitute 0.0005% of the total voting rights in Saab Automobile.
During the period ended 30 June 2011 GM companies purchased parts and services from the Group for an amount of € 32.8 million. During this period the Group purchased cars, materials, parts and services from GM companies for an amount of € 104.3 million. As at 30 June 2011 the Group owed a net amount of € 308.4 million to GM companies (including RPSs).
To me it looks like GM is still interested in using the engineering capabilities of Saab, and Saab is also a good client for GM. So it makes no sense for GM to actively hinder Saab’s success.
And what about the 9-4x??
Saab Automobile will pay GM for the 9-4X development costs and fixed assets for a total amount of $ 48.6 million and the complete amount has been paid or accrued as per 30 June 2011 and is included in the amounts above. In addition Saab Automobile will pay GM an agreed price per car produced for the coverage of the costs relating to additional special tooling equipment. For future model year changes Saab Automobile committed itself to pay GM a total amount of $ 9.3 million. As security for costs related to the production of the 9-4X, the Group has deposited $ 10 million in reserved cash.
It would have been nice to know what the agreed price is, but I don’t think we will never know. But whatever price it is, with MY production of maybe 20.000 cars, the MY change will cost $ 465 per car, so I hope they sell at least that much.
And what about the fees for GM technology?
Saab Automobile has committed itself to pay GM $ 17.5 million over a period of several years in exchange for the right to use certain technology in present and future models. At the end of the reporting period $ 7.5 million is recognized as a liability in the balance sheet.
Now we know how much Saab has to pay to GM for using their technology. If Saab manages to sell 450,000 cars till the end of 2015, where we may see a new 9-5 or a new 9-4x, it will pay about $ 39 to GM per sold car only for technology fees. There are many parts in the car that have a lower price tag. 🙁
It is interesting that the report only talks about technology and not about patents, it would be interesting to know the patents agreement between GM and Saab Automobile, or if there is any agreement at all.