As Saab entered reorganisation we thought this would allow things to run smoother. But in fact the opposite has happened. It’s just getting weirder and weirder. The Chinese deal, that seemed to stand rock hard started to crumble into dust over the last few days. Yesterday Swan announced in a press release that the subscription agreement with Pang Da and Youngman was terminated. Here is my view on this.
The reason why this happened is quite simple. Swan and their Chinese partners had an agreement that they would provide the bridge financing for reconstruction which quite obviously didin’t happen. On the contrary, Pang Da and Youngman offered to buy 100% of Saab leaving out Swan. That offer was declined by Swan who then asked the Chinese to confirm that they would stand by the earlier agreements. Obviously that has not happened and Swan had to react. So much for the simple part of the story…
Most of us found that offer of 200 million Swedish crowns for Saab pretty low. But for Pang Da and Youngman it would not end up there. A rough estimation would be that they buy at least 400 million Euros of debt (EIB, suppliers, several convertible loans) together with the company. So to get things up and running again they would have to put a lot of money into Saab.
Some may say that this is just about getting the technology to China without keeping Trollhättan alive. But I doubt that it would be that easy. The current cars (and on a personal guess even the next generation that is under development right now) all heavily depend on GM tech. And I can imagine that GM put something into the contracts that the use of their technology for example is linked to the existance of Saab as a Swedish company. Technology like the eAAM stuff is in a seperate company so if they wanted access to that they could have it much easier and maybe even cheaper. It just doesn’t make sense.
Trying to force Saab into bankrupcy also makes no sense for Pang Da and Youngman because this would most likely void most agreements Saab has. The name rights just for starters. It would even complicate the real estate situation as most assets are collateral for something.
So right now it looks to me as if Pang Da and Youngman made this offer they knew Swan would decline to get out of the current deals. They more or less force Swan to terminate the agreement without having to do that themselves. If they want to gain new negotiations or exit the deal is not clear, could be either one. But regardless of the intention it leaves Swan in a pretty difficult situation at the worst possible time.
From the indications I got North Street Capital might be able to fill that part and to bring in enough money to get through reconstruction and to get Saab rolling again. It’s not over yet but this may be tighter than everything we have seen since GM started to shut down Saab. I still have faith that things will work out but right now it all depends on getting a new agreement as soon as the middle of this week.
Tough, but we have seen even more unbelievable twists in this rollercoaster. Wait and see, keep calm and carry on – but you already know that.