As we continue to report, there is a constant shuffling of deals going on behind the scenes. Unfortunately, there’s still no resolution. As such, Swan must prepare contingencies for the worst.
From Bloomberg BusinessWeek:
Swedish Automobile NV, the Dutch owner of Saab Automobile, may liquidate even if it succeeds in selling the former General Motors Co. brand, as the proceeds may not be enough to pay off creditors.
Swedish Automobile, which has tentative agreements to dispose of Saab as well as its Spyker sports-car business, will consider “all of its options,” including a voluntary liquidation should the deals go through, the Zeewolde, Netherlands-based company said today in a statement.
The transactions would raise 132 million euros ($181 million) and would be insufficient to cover the company’s 136.5 million euros in debt, said Swedish Automobile, also known as Swan. A lack of approvals and final agreements on the deals raises questions about “the future of Swan and any settlement with stakeholders,” the company said.
Swan and the prospective buyers Pang Da and Youngman continues to discuss the options of a business based on the letter of intent stating that Chinese companies will buy 100 percent of Saab. The letter of intent expires on November 15, but without an approval from GM, it is uncertain if it becomes a binding share purchase agreement before then, write the Swedish Automobile (Swan) in a statement.
The company also writes explicitly that if the sale of Saab does not succeed or they can not secure new financing, management will probably not be able to ensure Saab’s survival. Then bankruptcy would be a threat.
The meeting took place at the Swan’s headquarters in the Netherlands Zeewolde.
The first notice of the extraordinary general meeting ended on September 30. When the plan was that the Chinese companies Youngman and Pang Da would buy into the Swan and own 29.9 percent and 24 percent respectively. CEO Victor Muller’s company Tenaci would own 27 percent.
The setup crashed and the parties presented the October 28 a letter of intent to Chinese companies instead would buy all shares in Saab Automobile and Saab Great Britain.
Then came the shocking news from General Motors on Monday that changed everything. The car giant yesterday said it will not let Saab sell the technology licenses required to build and sell the current Saab models.
Since then there have been ongoing discussions between Saab’s management and Youngman and Pang Da to find a solution that GM can accept. The deal also requires approval from several other parties, as Chinese and Swedish authorities and the European Investment Bank, as Saab has loans with government guarantees.
Regarding the Spyker sale, as we have been hinting for a while, North Street Capital is still involved. Though the extent of their involvement has been in flux, an unreported fact. Bloomberg also confirmed this, and as SvD reports:
Since Swan also negotiating to sell the Spyker sports car business to U.S. private equity firm North Street Capital is a risk that there is no activity left on the Saab is also sold.
“It may end up as an empty company with a lot of debt,” says Patrick Beijer Mountains.
The purpose of the meeting is mainly to provide information and hear the opinions of shareholders.
Swan’s shareholders since the beginning have seen the value of the shares to fall almost 90 percent. On Friday, shares were traded on the stock exchange in Amsterdam for 0.41 euros.
To move forward, Swan is trying to gain more time and extend the negotiation schedule, which makes sense because all parties remain very interest in reaching an agreement. From DI.se:
On Tuesday, November 15 is the parties’ intent out and then Youngman and Pang Da break off relations. It is uncertain whether a binding share purchase agreement is reached before that, without an approval from GM, Swan writes.
Therefore, is now negotiating with Youngman and Pang Da that may extend the exclusivity agreement, says stämmodeltagaren for di.se.
According to di.se, the format of the 100% ownership transfer must be changed to meet approval from GM, as we’ve reported for some time.
The format of the transaction is subject to change, Victor Muller’s message at the meeting, telling the participant to di.se.
Instead of Youngman and Pang Da becoming the owner of 100 percent, which was thought as the letter of intent between the parties from the end of October, is now discussed arrangement where Chinese companies become shareholders, and Swan as well. This as a way to deal with GM.
Other blogs are speculating that they will return to the old share structure of 29.9% Youngman, 24% Pang Da, but there are many signs that talks are beyond that point. GM has certain conditions now that must be satisfied, and the deal will almost certainly change.
Saab Automobile’s former owner GM, which owns the technology that several of Saab’s car models are based on, Monday objected to the deal and said it won’t continue to license its technology to the Swedish brand following the proposed change of ownership, a move that could scupper the planned sale.
Victor Muller said Swedish Automobile and its Chinese investors are now trying to find a new ownership structure that GM can accept, but that the old proposal of Pang Da and Youngman taking a 54% share is “off the table.”
In July, Swedish Automobile agreed with Youngman and Pang Da to sell a 54% stake in Swedish Automobile for EUR245 million, a deal which fell apart when Pang Da and Youngman instead offered to buy 100% of the shares in Saab Automobile and its U.K. dealership from the Dutch owner.
Muller said the ownership structure of the July deal was “very carefully crafted” with three large minority shareholders, non of which had control of the company. By offering to buy 100% of Saab Automobile instead the Chinese investors made it very clear that they wish to take control of the Swedish brand, he said, and that is, according to Muller, the reason they now have to find a new ownership structure if the sale of Saab Automobile is to be approved by GM.
“We have negotiated ourselves backwards,” he said.
While we know the numbers being tossed around, since nothing is final there’s no reason to complicate negotiations by revealing anything at SU. This is the most sensitive time in the company’s history, and they deserve space free from endless speculation to accomplish a deal. Reporting news is one thing, getting ahead of ourselves is another.
Please continue to be patient, the teams are doing everything they can to get a satisfactory outcome for all parties, as everyone is well aware that liquidation should be a last resort. No one prefers that outcome, even most creators and GM. There is far more money for everyone given an achievable sale.