Di.se speak with Lars Carlström (Genii)

Lars Carlström is a name that should bring a smile to face of any Saab fan when they hear it. He worked with several different parties over the course of around 12 months, trying to buy Saab Automobile from General Motors. The most prolific consortium, of course, was the Genii group, with Genii Capital and F1 boss, Bernie Ecclestone. There were even rumours at one stage, in the Swedish press only, that Genii and Spyker were lodging a joint bid for Saab.

Di.se have published an interview with Carlström today. I know from my own occasional correspondence with him (quite infrequent now) that he’s still very interested in Saab’s progress. I think that interest should come through in this interview.

Thanks to a few people in comments for the link.

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UPDATE: I received an email from DI.se Editor-In-Chief, Linus Paulsson, requesting that the full translation I provided be removed from Saabs United (along with any other DI.se copyright material).

I have reduced the provision in this article to two important excerpts only, and am awaiting their permission, which I’ve requested, to restore the full article. It’ll be interesting to see how this develops.

“Deal of the Century”

….In January a year ago it was the home stretch in negotiations for Saab Automobile’s future. …. Financier Lars Carlstrom, who represented the Genii Capital, with F1 boss Bernie Ecclestone on board, saw the Dutch Spyker, with CEO Victor Muller, emerge victorious from the battle…..

…..”This is the business deal of the century as I see it. GM had invested about 50 billion in Saab, and sold the company for pennies.”

……Now, a year after Saab got a new owner – how would you describe the time of the decision in January last year?

“It was a very strange situation and I do not understand why GM put such pressure on the process. The only explanation I have is a lot of pressure from the U.S. government.”

But GM still chose to reopen the closure decision to sell the site – why?

“For GM’s part would have been a better deal to the liquidation of Saab. Then you have no risk of preference shares, there was cash in the bank and so one might have sold off assets. But the attention around the company was enormous, not only in Sweden but also in the United States. “

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That last part is particularly interesting – the interest around the sale of Saab.

Of course, there was a whole slew of news stories around the world about Saab Support Convoys being held in support of the company. That kept things in the news.

There were other news stories, too, such as the story broken here on SU about GM plans to ship 9-5 tooling to China (a story for which GM execs had to provide an answer at the Detroit Auto Show).

But Carlstrom had a massive part to play in this attention, too. There was no way that GM could get away with saying that interest in Saab wasn’t significant enough when there was more than one party interested in buying it, and especially if one of the members of that extra party is someone of the profile of Bernie Ecclestone.

This is a great piece for Saab and it’s very encouraging to see DI.se publish it.

Those who wanted to buy Saab, still buy Saabs

When Saab were up for sale, there were a number of seriously interested parties.

The Koenigsegg Group used the Koenigsegg name, but were a group of individuals with various backgrounds in business.

Merbanco were a group based in Wyoming, USA, with extensive industrial and business turnaround experience. One of the guys involved with Merbanco, CJ, has been a regular in comments at SU.

Renco, a private company owned by Ira Rennert had interests in smelting, mining (which wasn’t too popular) as well as heavy machinery manufacturing.

The Genii name was used for a group put together by Lars Carlstrom, an entrepreneur in Stockholm. The group was named for Genii Capital, the investment group providing the core backing for the purchase. Of course, the group got a lot of media attention when F1 boss Bernie Ecclestone jimped on board. Genii was actually the third group that Lars Carlstrom put together in a bid to acquire Saab.

Beijing Automotive were also very interested and amongst the first round of potential buyers. Whilst they weren’t selected as one of the final bidders, they did proceed to buy some of Saab’s older technology.

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It’s been interesting to see that several people from the groups named above have gone on to purchase new Saabs even thought their interest in acquiring the company as a whole didn’t bear fruit.

Read moreThose who wanted to buy Saab, still buy Saabs

Lars Carlstrom Saab editorial in Dagens Industri

The following is a Googletrans of an article written by Genii/Ecclestone co-ordinator, Lars Carlstrom. It appears online at Dagens Industri.

Any translation tips would be most welcome…..

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Sweden betraying Saab
2010-01-20 07:41

The conditions for Saab have never been better. Yet it has been impossible to attract Swedish investors. They have taken on a negative and totally incorrect analysis, writes Lars Carlström, spokesperson for Genii.

Already in early 2009 pouring negative formulations of Saab Automobile from Swedish media. A media meltdown began, value-charged words like “finito” and “kaputt” flourished freely.

The values and facts that these pundits have based their statements on is hard to say. The most common claim, that Saab has been making losses in 20 years, were highlighted. Let us analyze what lies behind these:

An integrated Saab in GM was to optimize the GM’s performance – not Saab. It is considered to be amateurish to draw an equation between Saab Automobile AB’s results and performance of Saab’s entire global operations because a large proportion of consolidated revenues directly into the GM rather than the Saab.

Saab Automobile AB’s performance is a major component of the allocation and transfer pricing. Saab can not affect currency fluctuations as hedging, materials, production, sales geography and more centrally controlled within GM.

The purpose of this has again been optimizing GM’s results. Dependence on foreign exchange rates, primarily the euro, pound and dollar, has knocked Saab.

Production development plan, which also is controlled centrally, provides long life cycles in which the benefits of newer cars can not be realized. Saab outgoing 9-5-model is now 12.5 years old.

In a large multinational company like GM optimize the performance of the group and not individual units or brands. Nobody knows about Cadillac, GMC, Chevrolet has made money through history.

The loan from European Investment Bank, EIB, has been a hot topic over the last year. The debate has been whether the state should step in and prop Saab with warranties or not. Opinions have been many.

However, the government decided to provide guarantees to the EIB for Saab. The risk of the state is very low because the State has pledges throughout the Saab. These burdens are mainly valued at scrap value. Assets far exceeding the 400 million euros, just over 4 billion, as the warranty covers.

All this should be remembered that this is a loan to be repaid. Market interest rate payable on EIB loan during its seven-year maturity. Saab is in the entire state duration of the guarantee to pay a premium to the State.

Furthermore, Saab will pay all state and EIB advisers. Likewise, Saab will pay for the personnel of the National Debt Office dealing with the matter.

This should be weighed against the imputed cost of unemployment, lost tax revenues and the destruction of Trollhättan with disastrous effects for the entire western Sweden.

Saab has today one of Europe’s most modern and most efficient car plants. Saab has two completely newly developed models, 9-5 and 9-4X. The company is debt free.

The prerequisites for Saab has never been better – with a business plan that has very good opportunities to make Saab into a leading automotive company in its niche. It is therefore difficult to understand how something so positive has been able to become so negative in the Swedish media. The analysis has been non-existent and has been based on cutting the Spirit rather than facts.

This whole downward spiral has led to almost have been impossible to attract investors to the Swedish Saab. Investors have taken on the medial and wholly inaccurate analysis has flourished.

Are we in Sweden, the world’s least nationalistic people?

Lars Carlström
Coordinator, Genii-Ecclestone consortium and a host of other initiatives for Saab

The Saab sale situation (as I know it) today

Hi all,
It’s been very busy these last few days with the Saab Support Convoys – and rightly so.
I just wanted to provide an update as to what’s happening with the sale of Saab, from my own personal understanding and Djup Strupery.
As I wrote on the weekend, GM are still negotiating with Spyker right now on the sale process. The Genii group may still be in play, but as I understand it they are not the focus of GM’s attention right now. Genii may have more to do with this if the week progresses without a decision, but right now Spyker are the party sitting at the table and in all likelihood, they are the best chance that Saab has.
The fact that we haven’t had an announcement yet should be taken as a “no news is good news” situation.
Stephen Taylor, the liquidator appointed by GM, is still in place in Trollhattan, but as per the interview with Victor Muller published here earlier today (and as per comments by union officials at Saab) it appears the actual process of liquidating Saab is on hold for the moment. You could say that the fuse is set, but it is not lit.
That’s where we’re at – Saab’s not dead, negotiations proceed with Spyker, liquidator on effective hold.
Hopefully there will be an outcome very soon.

German report: Spyker and GENII lodging joint bid (not true). PLUS Statement from GENII

Comments are still switched off and will remain so for another 24 hours or so from the time of writing.

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There are a couple of reports I need to cover and as they’re somewhat related, I’ll do them both at once here.

Firstly, I covered a story earlier today from Business Week. That story stated that Spyker were the final remaining bidder negotiating with General Motors for the sale of Saab.

The Business Week story appears to be offline at the moment, returning a 404 page. I’ve contacted one of the writers, Ola Kinnander, and he’s unsure as to why it’s offline. It was due for an update and may be back up soon, however it has not been retracted.

UPDATE – the article is now appearing on Business Week’s parent website, Bloomberg.

As to the substance of the story, I wrote this at the time:

Genii say that they are still prepared to talk with GM, so it seems that whilst they may not have received the same cut-off phone call that Merbanco received at this point, GM’s focus is on doing the deal with Spyker.

I still believe that this is the case, that GM’s focus right now is on the Spyker bid.

Further to this, I’ve received the following comment from Lars Carlstrom, spokesman for the Genii/Ecclestone group:

We have no information saying that Spyker would be the last remaining bidder for Saab.

And you should also remember that Carlstrom has been quoted elsewhere in the last 24 hours, saying the he plans on speaking further with GM next week.

This would tend to confirm what I wrote above, that they haven’t received any sort of cut-off notice at this point, but I maintain my understanding that GM’s focus is on Spyker right now.

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There has been a report in a German publication today stating that Genii and Spyker would join together to present a unified bid.

This report also featured in some Swedish papers earlier this week but was denied by Genii at that time. Spyker also stated that this was not likely.

I have also asked Lars Carlstrom about this today, receiving the following reply:

“We had discussions around this earlier but decided to continue one by one, we admire the strong support Muller has given Saab. There will always be an option of working together in the future, but for now we work independently as parties trying to succeed buying Saab”

A joint bid would effectively mean changing the bid, changing the ownership composition, etc. Any advance work that’s been done with the Swedish government (if any) would have to be reversed and re-commenced.

At this late stage with a liquidator in place, such changes are not likely.

SvD speculate on a joint bid between Spyker and Genii

I know a few of you have mentioned this in comments already and it would be nice to believe that it could happen – a joint bid that cold finally push the deal over the line.
Svenska Dagbladet has taken the idea a step further and asked the question of both Lars Carlstrom (Genii) and Victor Muller (Spyker). Much like political reporting, the refusal to rule it out completely has led to a story suggesting that it could happen.

There is a possible scenario that the Genii Capital Group and Spyker Cars putting a joint bid for Saab. Last Tuesday tolerate both speculators at. “Our genuine interest in Saab has brought us together,” said Genii Capitals spokesman Lars Carlström.

If the ongoing issue for GM is not about price (“you can buy it for a dollar”: Nick Reilly) but about sustainability, then this would make a truckload of sense.
Bear in mind, however, that these guys are all entrepreneurs and they all got into this transaction with a business plan in mind. Halve that business plan and it’s probably not so attractive, especially with the complexity of joining two organisations together who aren’t used to working with one another.
I’m not saying it’s a bad idea, but SvD are at risk of taking two non-denials and turning them into a “yes” in the public eye.
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One reader here, Ulf W, went to the trouble of sketching out a view of a possible grouping, throwing Koenigsegg in for good measure (which would be a definite bonus if it happened) due to the technical developments they’re working on, which could have possible racing applications.
Click.
SpykerGenii.jpg
Like I said, I’m hesitant to put too much stock in this. At the moment it’s just a couple of things to which the players have responded “never say never”.
But hope remains.
My main hope right now is that GM stop this waiting game and get something done.

Another busy day in Saab-land – Spyker, Genii and Merbanco summary

There are a few good reports floating around that I wanted to bring to the front page.
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Firstly, TTELA’s Magnus Nordberg has done a (where does he get the time, indeed?!) good interview with Christian von Koenigsegg. It’s an interesting read, of course, because CvK has been through all of this before.
Christian von Koenigsegg supports the notion that the “show me the money” stance isn’t about purchase price, but about solidity and the ability to support the company in the longer term.
It’s a recommended read (and hello to CvK, who I hope will entertain the idea of some Saab collaboration in the future).
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You should already have read right here at SU that Merbanco have made a revised bid for Saab, in accordance with changing wishes from the seller.
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Genii are also working on a revised bid for Saab, according to Bloomberg:

We fully expect to have a competitive bid similar to Spyker’s by the time GM wakes up” today, Carlstroem said in a telephone interview. “Funding the deal isn’t an issue. We now know what GM wants for Saab. I’m sure GM will announce the sale of Saab by the end of this week.

I hope he’s right on his timing predictions. Having those Saab Support Convoys as a celebration would be mighty nice…..
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Automotive News has a bit more coverage and quotation from Victor Muller, from Spyker, following his speech at the AN World Congress yesterday.

Dutch niche carmaker Spyker Cars NV hopes to reach an agreement with General Motors Co. to purchase Saab in “days, not weeks,” Spyker’s CEO said today.
If that doesn’t happen, CEO Victor Muller said, Spyker may have to give up.
“There is a point in time where we would say, ‘This is not for us,’ ” Muller said at the Automotive News World Congress.
But for now, he said, “The last time I looked, which was a half hour ago, we were in the midst of the [Saab negotiation] process.
“That doesn’t mean too much, but we’re absolutely, definitely in negotiations.”

….and there’s more, which is quite interesting…..

Saab’s loyal buyers were sometimes frustrated by the way the Swedish automaker’s product looked under GM, he said. “People were interested in buying a ‘Saab’ Saab, not an ‘Opel’ Saab, for instance,” Muller said.
If Spyker does acquire Saab, Muller said, he plans to hire more workers, not fire them. He said he wants to increase production capacity so the new company, which would be a Dutch public company called Saab Spyker Automobiles NV, can build Saabs along with a higher volume of Spyker vehicles. He said Spyker plans this year to make about 100 cars that will sell for $200,000 to $250,000 each.

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There is a GM board meeting scheduled for Wednesday.
The time is now.
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Thanks to all for the news stories and links.

Genii haven’t bid for Saab yet??

UPDATE: Genii/Ecclestone have now confirmed that they did submit a bid by the deadline last week.
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This is a new one.
I was sure that the bids were all in – I got the email and release direct from the source – and I know for certain that a deadline was set for them to arrive at DB last Thursday.
Perhaps the resources of Genii and the name ‘Ecclestone’ meant that an extension was in order.
From Reuters:
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Ecclestone, Genii gather cash for Saab bid -paper
STOCKHOLM, Jan 11 (Reuters) – Formula One supremo Bernie Ecclestone and investment company Genii Capital will soon have initial financing to show GM [GM.UL] they can fund a purchase of carmaker Saab, daily Dagens Industri wrote on Monday.
The paper said Ecclestone and Genii would have 500 million to 1 billion crowns ($90-$180 million) in an account in a couple of days.
However, it was not clear whether the group had sent in a formal bid for the loss-making Swedish car firm.
“I have had contacts with GM, who have given us a deadline of the beginning of this week, which I interpret as Monday through Wednesday,” spokesman Lars Carlstrom said.
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Thanks to Kieth.

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