DI.se on the New Plan

di.se report about a possible backup plan to save Saab without needing GM’s approval:

After again having been cut by GM gave Victor Muller and China Youngman during the night of Wednesday to grips with a solution in which the U.S. automotive giant will not have anything to say. This reports Dagens Industri.

A source familiar with the negotiations said to Di that the new plan means that Youngman injects billions – but without that it is linked to any ownership, and thus get around GM’s veto.

But it is urgent. It will not collect any money by noon on Wednesday will leave administrator Guy Lofalk a request to cancel the process.

In terms of size as stated supply from Youngman – probably along with Bank of China – about 5 billion SEK in the first step. Money will then go to solve the EIB loan, pay subcontractors and start production in Trollhättan again.

Dagens Industri state it was unable to find out the securities offered Youngman and Bank of China, but it is probable that these are some sort of convertible shares with long maturities.

I think this plan has a chance to work if the investors really want to get that deal done. For Youngman and the bank it would be more comfortable to step into ownership but as this obviously won’t work there is no other option. I’d expect those shares to be converted into real shares in a few years. No ownership change means no approval needed by GM. But if GM’s main demand really is that there is no Chinese ownership in Saab they should be satisfied with such a solution, too.

In another article di.se state that Victor is optimistic that this can work out:

After GM also said no to the proposed ownership constellation in which the Chinese biltillverkarenYoungman and a Chinese bank would take almost 50 per cent stake in Swan, spoke Victor Muller on Tuesday night about a “Plan C” to try to save Saab from bankruptcy.

And this plan is still alive according to Victor Muller, despite news that Lofalk wants to stop reconstruction.

“Yes,” replies Victor Muller in an SMS to the question if there is still a chance that “Plan C” will succeed.

Victor Muller confirmed to di.se that the new plan is to Youngman and a Chinese bank injects billions of crowns, without connection to any property. As Dagens Industri could tell on Wednesday, this is a way of trying to get around GM.

“Youngman would not have any shares, neither would the Chinese bank,” writes Victor Muller.

If the involved parties agree on a plan like that the lifeline for Saab could be revived through a quick cash injection by Youngman. This should be possible as soon as a new MOU is there. Sure there may be other hurdles until the final deal can be inked but it definetely looks like GM is the highest one.

paddan
Member

A daunting task, but where there is a will there is a way. I trust that legal counsel has vetted this option.

Allan B
Member

+1

SAABfansince14
Member

Precisely what is needed, no approvals. Fingers crossed and optimistic again.

Thorfinn
Member

A glimmer, just a glimmer.But let’s hold on to it…

Dan P
Member

Such an easy, difficult solution. Come on Saab!

900 classic cab
Guest

How can that money be transferred without the NDRC approval ?

Kahl
Member

If it is not tied to ownership then it is not a foreign investment decision, I guess it won’t need NDRC approval anymore.

Probably, BoC lend to Youngman at a fixed rate, Youngman use that to fund preferred shares with a fixed rate dividend for some years. But I highly doubt the possibility of such transaction given the current monetary policy in China.

900 classic cab
Guest

Thanks for the clarification.

Nate 9-3
Member

I am heartened to see that Youngman wants SAAB so badly. Chinese firms do not have the reputation for behaving this way.

MerlijnH
Member

But why would Youngman ever wants to do this, putting so much money in a company if they dont own anything? What would they get in return?

hogge
Member

I’ve been saying this for weeks.
Hope that Saab import the Chinese built 9-3 and sell it right under GM’s noses!

Martin T16s
Member

Exactly my thoughts Dave.

CoolCombi
Member

I still have hopes of owning an NG 9-5 Sport Combi one day. I’M WITH VICTOR!

michaelb
Member

There must be some difficulties, though:
Why did they not apply the same with respect to VA in April? Negligence or the desire to impose VA as officially recognized shareholder?
Why not the same solution months ago with PDYM?
Is NDRC approval assured in this case?
Does GM have possibilities to end supplies or take other, maybe legal steps?

To me, the cleanest solution would be to pay out anybody in the form of loans upfront, and then convert the loans into pref shares.

nickX
Member

could even be a very good outcome, if the money is there and decisions are taken in sweden….

hans h
Member

The 9-5 is a little bit too big for me. I’m waiting for the new 9-3. Which I will be able to buy second-hand in a few years. I always buy second-hand cars. 🙂

Saab Up!

Keith
Member

I agree with both your statements…. which is a problem for Saab. A lot of us Saab fans are thrifty lads…

Saabim
Member

I’m with Victor. It will be all best done without any approval from GM!

Peter, Sweden
Member

+1

Niklas G
Member
Certainly, time is one major problem here, but still I can understand if VM still is optimistic about finding a solution. Apparently Yongman and others really really eant to sign a deal, put they are putting in a lot of money, so it is not really strange that even if VM has plan A, B , C, D, …, Youngman and Pang Da first want to try the plan that would have been best for them (even although VM said from start that there is not a chance on Earth that GM will approve on that), then over to a… Read more »
wfg
Member
Not to be dependent from GM’s “ok” sounds a clever idea. Though, I do have some doubts that such cash flow will be done without any commitments from SWAN’s to the Chinese party that might be necessarily subject of GM’s “ok” also. But there is something very important others in the field should acknowledge! SAAB is obviously still that much attractive that a bank and two companies and a bank want to invest millions!!! Honestly, that means a lot and should change something in the head of people in Sweden, at GM, and perhaps in other car manufacturers headquarters. Honestly,… Read more »
Angelo V.
Member
Your point is excellent—-with one catch: GM is a global player, so they are always going to be in the middle of it, saying “This isn’t the best thing for our shareholders because by allowing this sale, we’d be assisting our competitors.” It’s clear to me at this point that GM (and for that matter, Guy Lofalk) don’t want Saab to continue. Muller is fighting a mountainous uphill battle and I applaud him for continuing to try. I find it interesting that GM can continue to reject proposals and articulate why they can’t go along with a deal—-but that can’t… Read more »
scand
Member

It’s like he keeps trying to pound a square peg into a round hole. And if that won’t work, try the triangular one, or the octagonal one.

You can disguise the amount of chinese money needed to successfully save saab any way you like… But GM is going to see it as above 19.9 percent.

So they won’t play.

And They own the only round peg.

gannet
Member
eh..?? so they want to pump money into something they wont be owners of? And GM is supposed to believe that someone who is pumping money in Saab – just for fun perhaps – without any legal ownership is not by any chance “in touch” with IP and technologies? GM will say NO to that too. Because this “plan C” kind of VM trick is just juggling with legal terms. Chineese can say as many times “we do not own anything”, GM will not swallow that. What sort of credible and trushworthy reasoning can Chineese give so anyone would believe… Read more »
Keith
Member

Bingo. If this scheme is true, it sounds like it could have little to do with Saab at all, but rather Youngman wanting a technology jump start into the Chinese auto business.

It’s fascinating theater though.

Nate 9-3
Member

It’s too important to some of us to be “fascinating theatre”.

saabserb
Member
What about the new platform? It is flexible, can be a basis for a lot of models. GM can think what they want, but they also have legal obligations to SAAB. So they can not just stop SAAB from being existing, because they smell a rat. If I understand correctly, GM will not be asked at all this time because the ownership structure is not changed. GM can stop delivering 9-4 and face a legal process initiated by SAAB. Or GM can initiate a legal process claiming that the Chinese will steal their technology. That’s about it. I am more… Read more »
Keith
Member

GM can’t stop Saab from existing, but they can stop providing product, which means no cars get made for at least a couple years. Imagine if this went to court, how plausible a Saab victory would be in claiming that Youngman really hadn’t in effect purchased the company.

gannet
Member
Oh, they can. Easily. They can say (and I am afraid they will): “Dear VM and Saab, you tried to trick us and go further with chineese deal to juggle with terms (non-ownership nonsence, pretending investors are not involved) and basically go behind our backs, therefore we cancel licencing GM’s stuff for 9-3 and 9-5 and stopping 9-4” No contract is unconditionaly forever. and GM can go on “wrongdoing” and “breaching the trust” and so on. In that case, Saab would have to wait years without production for new full nonGM car to have anything to produce. Meanwhile it is… Read more »
Keith
Member

I think we are saying the same thing.

michaelb
Member
What you might miss is the time dimension. The Chinese might become owners later on, when all the contracts with GM will have expired. Obviously in between the IP issues and GM’s interests as stated in the all the contractual framework with Spyker / Swan will have to be fully respected. I can imagine, that Saab will have no more interest at all to use GM IP already in the new 9-3, even if it delays development. For sure no more GM IP in the successor vehicles for the 9-5 and 9-4x, given the complicated situation and restrictions. I don’t… Read more »
Kahl
Member

Well, offering preferred stock to Youngman is really the last option left and it makes perfect sense because this is usually how a VC works.

gannet
Member

I might be wrong, anyone can be. but as I said before: Looks like trick on GM to me.

Kahl
Member

Partly agreed.

Trick by VM, compromise of YM.

saabserb
Member
Well selling to Spyker few years ago could have looked as a trick, since VM borrowed the money from VA and this could potentially be a trick to develop the Russian car industry. Convertible loans are what the name says: loans that will in few years time be converted to shares. No conspiratorial theories here. You think that the VM and the Chinese will be in love and that VM would obey to all orders from China? I wouldn’t bet on that. VM could have taken the blue prints and sold them to Youngman for cash couldn’t he? I mean… Read more »
zippy
Member

So whats in it for Youngman. This doesnt make much sense to me and why would the NRDC approve such a thing?

Khrisdk
Member

Youngmans survival as a car maker in China.
NDRC wll approve what they see fit and Youngmans partner in car maufacturing business in BAIC. Who would probably not be unhappy to keep the attachment to Saab IP. In 3-4 years time. And is ChiGov

Khrisdk
Member

Oh..me thinx, not to be mistaken for facts 😉

Polle
Member

I assume that the licence for the Phoenix will be re-used as collateral. If I’m correct, that deal never went trough and can be of good use now to give some sort of security to Youngman.

MariusGTV
Member

If this means the survival of our beloved Saab, then I hope it works, I really do. I just can’t shake off the feeling that they are clutching at straws with this.

This just looks like a final effort to try to demonstrate that all that could be done, was done but in fact the writing was always on the wall.

Sorry guys. I think this is may be game over!

M.A.
Member

This has been said quite often over here: “It’s no over till it’s over”.
But this new plan might be Saab’s very last chance of survival. VM hasn’t surrender yet, so there is still some hope.

Jelmer
Member

Maybe its time to start supporting Youngman thru a charm offensive and let them know investing in Saab is worth doing, and they can count on a lot of sales in the near future. Does anyone know the way to contact them thru the social media or email etc..

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