SAAB Pressrelease: Funding from NSC

Trollhättan, Sweden: Swedish Automobile N.V. (Swan) announces it has received a commitment from North Street Capital, LP (North Street) on the funding of Swan and Saab Automobile AB (Saab Automobile).

The offer consists of the following transactions:

Subscription to 2,386,635 ordinary shares in the capital of Swan at a price of USD 4.19 per share for the purpose of funding the working capital of Swan, Saab Automobile and Saab Great Britain Ltd. The shares to be issued will be paid in full by Friday October 21, 2011.

Procurement of a loan to Saab Automobile in the amount of USD 60 million to be collateralized by a first lien on certain assets of Saab Automobile as well as a second lien on the collateral as pledged to NDO. This loan is subject to further documentation. The object of the parties is to finalize documentation no later than Monday

October 24, 2011 with subsequent funding within two days thereof.
Swan intends to accept this offer because it has doubts that the bridge funding of Youngman and Pang Da, of which a partial payment has been received, shall be paid in full on 22 October 2011. Immediate availability of funding is necessary to continue the reorganization process of Saab Automobile.

64 thoughts on “SAAB Pressrelease: Funding from NSC”

  1. Interesting key phrase in the release:
    ….Swan intends to accept this offer because it has doubts that the bridge funding of Youngman and Pang Da,….

  2. I guess that means $10 million by 21 Oct which buys a little more time. And hopefully an agreement in place and more cash before the creditors meeting.

  3. Hmm, I wonder. This might be a public shot across the bows to the Chinese. I wonder what assets of Saab Automobile AB SWAN (as opposed to Saab Automobile AB) is able to offer a lien over. Presumably it can only be assets which SWAN already has some control over?

    That being so, I wonder if the security is part of Phoenix, and whether this move represents an attempt at a ‘boobytrap’ strategy to make sure that the Chinese cannot get Phoenix for next-to-nothing in case they decide to try that?

    Another interesting deal from VM.

      • Pang Da already has a lien on Saab UK.
        And the NDO has a lien om Saab Parts.

        The only solution is a second lien (as mentioned in the press release).

        • BoeBoe
          To my knowledge Pang Da has not yet released loan funds to Saab/Swan, the money it has transferred to date is an advanced order for cars, so they are unlikely to have security in the form of Saab GB.

          • Read the semi annual report please.

            It clearly states that Pang Da got Saab UK as a collateral for the money they paid to Saab for the cars they ordered

          • Yes, the whole of Saab GB (also Saab City). And that is not so strange. The value of Saab UK is only 22 million euro and Pang Da paid 45 million euro for the cars they ordered.

            As per June 2011, Saab has received pre-payment from customers amounting to €60.5 million. € 58 million of this amount relate to prepayments of cars from Chinese companies during the second quarter, whereof €45 million were received from Pang Da. These agreements stipulate that the car sales agreement can be terminated by the buyer with not less than six month notice. In the event of termination, the amount should be repaid within six months from termination at 7% interest. The prepayments from Pang Da are secured to Pang Da through a pledge on the shares of Saab Great Britain. In the cash flow statement the amount is included in “Change in current liabilities”.

  4. Why does NSC pay 4 times the current stock price?

    There must be something else behind this transaction than to be nice to Saab but anyway all money are welcome 🙂

  5. Does this mean that even Saab themselves are starting to doubt Youngman’s and Pangda’s intensions, or is it more about NDRC’s prrliminary decision that everyone’s waiting for? Isn’t Youngman/Pangda supposed to be as interested in the bridge funding as Saab is? Or are they not allowed to? Getting a bit confused here. I mean, how can Saab convince its partners and creditors about the future, while doubting their own businesspartners themselves?

  6. I love SAAB but I think all of this has just gone a few steps to far! Time pull the plug and let everyone move one to something else! VM if you read this please let it go now, it’s embarrasing.

    • So, if we have a sick patient that MIGHT not survive, should we give him a shot in the neck instead of trying to treat him and hope that he recovers?

    • OK – this is the first time I’ll say something this strongly worded – but KarlR, you are a moron. Keeping fighting is EXACTLY what leadership needs to do at this moment. If you can’t stand the heat, leave the room. Nobody’s requiring you to pay attention, hit F5, care, keep coming back to see what’s up, be around watching while people who are working to make their (and our) dreams live on do their hard work. Move the heck on, KarlR. Oh, and when production starts up again, be a hypocrite and come buy one of the sexiest cars that money can buy because you can’t help yourself. What a moron.

  7. Karl, certainly it is getting more complex and confusing every week, but I cannot let go if there is still fight within Saab and VM has the eneregy, then good luck to him, I don’t want anyone to say Saab gave up.

    • I just dont think it’s fair to give people this kind of hope when it’s so uncertain. Even if they restart it’s very unlikley they will survive. 🙁

        • Sure if it comes from you! Since you are one of the people that dont give other people to have an opinion. This is mine. Time to close down now and move on. Maybe on the Audi forum people will understand that there is different angels on everything!

          • Trust me I am a strong advocate of voicing many different opinions and I respect yours.

            I just asked you how you would feel if a stranger told you to do the same as you just told VM when you wrote ‘pull the plug and let everyone move one to something else!…..let it go now, it is embarrassing.’

          • KarlR, I so hope there will be different angels still to come to carry SAAB through these stromy waters. When they arrive, I will look at them from all different angles just to be enchanted, seeing them saving SAAB 😉

            Meanwhile, I refuse to give up hope.

      • Karl, I can certainly understand if you think it is too late and it will not succeed. Others hold that same opinion and all opinions are open to discussion because the outcome is uncertain at this point. But I think what others are objecting to here is your call to VM and others at Saab who choose to believe there is hope and continue on to quit and give up. Just as you do not feel it is fair for others to tell you to change your opinion, it is not fair for you to tell those who are directly involved (and not observers as we all are) to quit. They have information that we do not have, so if they choose to continue on, that is their choice.

        At this point, some opinions will turn out to be correct and others will not…..the same as it was when GM started the shutdown on Saab in the past. That time it worked out for Saab. This time I hope it works out too, but at this point nothing is certain.

  8. It’s impossible to analyse this move without at least some inside knowledge. Anything we could write here would be nothing more than speculation pure and simple. I mean, why would NSC pay a 300% premium for the shares of Swan? I know the guy behind NSC is a friend of VM’s and a racing type as well but this kind of money surpasses the bounds of friendship. Money is money and business is business, after all. So my guess would be that this is not just a straight and simple share and loan deal. But what it is I can’t fathom, there are too many unnown factors and variables floating around for anything approaching a sound analysis. But I do trust VM on stuff like this, it is when he is at his best.

    Ivo

  9. The thing that worries me is that every deal that has been announced so far, was never completed; we had Hawtai and also the deals with Pang Da and Youngman are rough rides. Let’s see what this one brings… Fingers crosses!

    • Why? North Street is an venture capital company. If they choose to offer a loan to Saab under agreed upon conditions, why do you “smell a rat”?

  10. As I read it (and I might have got the wrong end of the stick), the shares and loan add up to almost 70million USD. What interests me is not whether or not they trust Y/PD to come up with more bridging finance before they get the all clear from the NDRC for the long-term financing arrangements, but what is the intended purpose of the USD70m? What aspects of ‘reorganisation’ need that much money at this time? This will potentially dilute Y/PD’s interest and must surely be seen as a big negative by them, so what justifies the size of this deal if it may in some way deter sizeable long-term Chinese investment? There seems to me to be something ever so slightly suspect about this. It may just possibly not be so much about Saab’s long-term future, but about VM protecting his own interests in some way. We shall see.

  11. Well, one thought is this: how are the share prices calculated under the GEM facility? If they refer to the sale price in ANY market (not just shares traded on the public exchange), this deal could push up the share price to allow a further placement of shares to GEM. Similarly, do the same rules apply to the YM / PD investment – IIRC they’re based upon share price? VM can’t talk-up the share price by lying, but he can sell shares at a higher price to a willing participant, whose stake would then in turn be less diluted by a subsequent additional sale.

    All very intriguing.

  12. It all looks a bit strange to me… – But I don´t know much about economical transactions.- . Hopefully there is not a hazard-game going on. Saabs future is much to important to that. And – in the longer run – also Saabs integrity and independent thinking is depending (!) on a reasonable transparent and honest economic base and structure…

  13. Published: 16:30 CEST 20-10-2011 /Thomson Reuters /Source: Swedish Automobile N.V. /XAMS: SWAN /ISIN: NL0009816248

    SWEDISH AUTOMOBILE INFORMED BY ADMINISTRATOR OF APPLICATION TO TERMINATE VOLUNTARY REORGANIZATION

    Zeewolde, The Netherlands, 20 October 2011 – Swedish Automobile N.V. (Swan) announces it has been informed that the administrator of the reorganization, Mr. Guy Lofalk, will apply for termination of the voluntary reorganization of Saab Automobile AB (Saab Automobile) and two subsidiaries at the Swedish court in Vanersborg.

    In spite of the funding commitment of North Street Capital LP which was published earlier today, the administrator who leads the reorganization, Mr. Guy Lofalk, will file an application at the Swedish court to terminate the reorganization process. Saab Automobile shall contest this application and request for continuation of the voluntary reorganization process.

    Simultaneously, Saab Automobile shall apply at the court for replacement of Mr. Lofalk as administrator.

    – Ends –

    • Well apparently when VM said all was worked out with Mr. Lofalk the other week when Saab was going to ask to have him replaced, apparently it either was not as smooth as he thought, or something else has changed. Looks like the rollercoaster is cresting the top of another hill…

  14. I agree with Skwdenyer. I think this entirely has to do with the IP. If there is anything that you wouldn’t trust the Chinese with, this is it. If Youngman were to hold collateral interest in the IP for the Phoenix, which is a modular architecture that can accommodate at least 3 entire vehicle lines, for the low low price of $70M, why would they go through with the deal? With that in hand they could have easily (I’m sure) asked the NDRC to deny the deal. BAIC paid almost 3 times that amount for IP that was ready for Saab’s refuse bin. Honestly, the notion of making the IP vulnerable to secure the $70M bridge loan always made me feel very uneasy. Our IP one of the key reasons we still exist today and have value to a Chinese auto company. You take that away and the fat lady would have been singing for sure. This is a great move by VM!!!!!

  15. Again, this is BS. North Street is the product of one Wall Street dreamer who hasn’t actually got two cents to rub together. If he was genuinley interested in Saab, might the time to invest this money been… oh I don’t say a few weeks ago? It wouldn’t have made any difference to anyone if the money was in before the PangDa/Youngman deal funds came in, so why wasn’t the money paid in then? If this only to keep the lights on, why wasn’t it paid in then?
    Its not like Saab/SWANs situation has changed in the lase 10 days. And this from a man who only yesterday was saying he wasn’t interested in investing in Saab!

    This dreamer is obviously some kind of buddy of VM and is the only person who VM can rely on to make a statement like this today. They knew that the PangDa money wasn’t going to make it and they knew that this pm the news about Loflak was going to be leaked. This is yet another desperate attempt by Muller to keep the lights on by influencing the NDO and the creditors. I would imagine that the NDO will see through it in an instant.

  16. What really is North Street Capital ? How long has it been in business ? how much money is under management ?

    I cant find any answers to the above, and the office address? well….

    The address on the face of it, is swank (Greenwich, Connecticut is the center of hedgefunds etc).

    But, google 500 West Putnam Street, suite 400, greenwich, Ct and you find that it belongs to a virtual office company called Regus . North Street Capital’s fax number, for example is the generic Regus one. While there is nothing inherently wrong with having a virtual office, from Regus website,

    “Clients sign a one-page agreement and can move into their new space literally overnight”

    and again, from their website;

    If you’re looking for a business address and support services that reflect the professionalism of your business but won’t break the bank, then read on. A Virtual Office from Regus gives you a prestigious address and fully trained call handling team that will add that wow factor to any business at a price you can afford
    It’s great for:

    Start-ups, small and home based businesses looking for an enhanced image and support services plus growing companies wanting to establish a presence overseas, making risk-free expansion a reality.
    Discover what a virtual office can do for you:

    A Regus Virtual Office gives you an enhanced business image, complete flexibility and support without the overhead.

    A great address – choose from 1100 locations worldwide
    Your mail forwarded or saved for you to collect
    A local telephone number with scripted call answering, screening and forwarding
    Your messages passed on by phone, SMS, email or via secure online portal
    On-site admin support, for everything from photocopying to travel bookings
    All the benefits of a full-service office without the overhead

    And this co is going to rescue Saab ???

    Hmmmmm.

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