Official – Saab’s reconstruction period has ended

It was announced earlier this week that this would be the case, but seeing Saab’s reconstruction period has been such a large part of the Saab story this year, it seemed necessary to have an entry marking the end of this process.

This from TTELA (via Googlywoogly)

Reconstruction of Saab Automobile is now formally closed. The decision was taken by the District Court in Vänersborg on Friday morning.

Guy Lofalk, lawyer and the person responsible for reconstruction, said on Wednesday that he would not request additional time for their work and thus was the case in principle clear. His statements came in to the court shortly before closing time.

Here’s to the success of the next stage in Saab’s journey towrds independence!

Would Koenigsegg Group be wrong to expect government help?

The Swedish government have helped Saab to the extent that the law requires them to help. They provided assistance with wages whilst Saab was in reorganisation. They have also provided research and development assistance to Saab, and many other companies, in the interests of growing Swedish industrial know-how. Many governments do this, so it’s not all that unusual.
It’s becoming increasingly clear, however, that the Swedish government will not provide assistance for Saab in the form of a loan that will assist them in getting through the next few years.
The Koenigsegg Group say they would like to find another 3billion Swedish crowns to finance Saab’s operations. It’s not clear to me whether they need this to finance the purchase of Saab from GM, or whether it’s what they want in order to run Saab the way they want to. It seems this money is what they need to achieve the business plan they’ve presented to GM as part of the purchase process. GM have agreed to fund part of the plan. Koenigsegg Group are said to be putting in around 700mil SEK themselves and they seek to fund the remaining 30% via borrowings.
What remains as a matter for conjecture, then, is whether or not they should get it with assistance from the Swedish government.
We all know what’s happened in the US, where they stopped short of actually saying the Big 3 were too big to fail, but their actions implied it. France have helped out. Germany has a massive scrappage scheme. I’m pretty sure the Brits have stepped in, or at least offered to.
Even here in Australia we have had governments of various persuasions that propped up car companies over the years. Mitsubishi have enough lives for 10 cats before they finally pulled the pin a few years ago.
Because the jobs and the industries are important.
I’m not sure whether or not Saab will succeed in the long term. I’m quite confident they won’t go down wondering, though. I’m sure that if given the chance, they’ll build the absolute best cars they can design.
The other thing I’m not sure about is whether or not Saab have been bailed out at any time in their history. I know the Wallenbergs probably had to put money in a long time ago, and that they struggled to profit when under Scania’s umbrella, which led to their sale to GM.
But if they’ve never been bailed out by the government in the past, then what is so wrong about asking for government assistance this time? Saab are a vital part of a vital export and technology industry in Sweden.
What is so wrong with asking for a government loan (not a handout) to get a real chance at survival and independence?

Background information on the Saab-Koenigsegg deal and Saab’s reorganisation

Swedish news service published an article with some good background information on Saab’s situation with the reorganisation process. Specifically, it deals with debts, and Saab’s vulnerability to debtors once out of creditor protection.
This isn’t about building or driving cars, but is relevant material in terms of understanding Saab’s current position.
The translation was done by ctm for Saabs United readers.
Friday last week saw a telephone conference in the creditors’ committee, the group of creditors that Saab is obliged to keep informed during the reconstruction period. That was when Saab said that reconstruction now is about to be closed. But no details on the financing of the deal with Koenigsegg were given.
– “We had a short telephone conference in the committee. I do not want to discuss in detail what was said, but regarding the financial situation nothing were discussed. There were no news at all,” says Mats Hagelin, the Swedish Tax Agency’s representative in the creditors committee.
Saab has been under reconstruction since February 20, and has since been protected from being declared bankrupt. On Thursday, August 20, the reorganization period ends and Saab’s CEO Jan Åke Jonsson has confirmed that there is no intention to seek a further extension.
75 percent of the debts of 10 billion SEK has been written off in an arrangement which was completed June 17. GM has paid the remainder of the debts to suppliers and have converted their debt after the composition of SEK 2.8 billion to equity, according to news sources.
As of Friday, August 21, it will be theoretically possible for a creditor to put Saab in bankruptcy.
This, however, requires that the applicant can demonstrate that the company is insolvent, either by being unable to pay its debts as they fall due and/or can’t pay future liabilities.
– “The protection that the reconstruction means is not retained after Thursday. But on the other hand, a reconstruction puts a hard strain on the company’s liquidity because you can’t manage invoices as usual, with credit, since they must be paid immediately. There are advantages to exit a reorganization period,” says Mats Hagelin.
The importance of showing up an economically healthy company is also a big one if Saab has to convince the European Investment Bank that they should get the loan of 4.3 billion SEK.
– “It is probably doubtful that a company applying for loans from the EIB can be in reconstruction,” says Mats Hagelin.
He stresses that the Tax Agency is not interested in forcing Saab into bankruptcy. Instead he express a “hope that the deal in any case will be successful.”
– “We have no reason to put Saab into bankruptcy. We have no debt not covered by the composition. Saab has paid all tax debts during the reconstruction, so the claims we, the State, have are not due until next year,” says Mats Hagelin.
Although the Tax Agency hopes that the deal with Koenigsegg Group goes without a hitch, the authority still made a declaration of no confidence of in connection with vote on the composition proposal in May.
Of the 579 claimants, 107 chose not to participate in the vote. 472 creditors – equivalent to 81,5 percent – had given administrator Guy Lofalk a proxy vote in favor of the composition. The Tax Agency voted no on the grounds that the financial solution was too unclear.
Was the meeting last Friday of any importance for you?
– “For our own part, it was not that really interesting. We had marked our intention with the composition proposal. We voted against the proposal. I can’t say that the meeting revealed something that we benefit from. You can say that the meeting focused on further action, I do not want to be more specific than that,” says Mats Hagelin.
The Tax Agency has claims at just over 348 million SEK and is not a leading creditor. The largest creditor is GM. The 348 million SEK is money that Saab was paid in the form of State wage guarantees and social security contributions for employees during two months. In addition, there is a smaller amount of customs duties.

Christian von Koenigsegg on the Koenigsegg-Saab deal

Earlier this evening, Saab uploaded three videos to one of its news distribution companies. There was one video each of Jan-Ake Jonsson and Christian von Koenigsegg, and there was one edit featuring the both of them (as shown earlier via GM Europe TV).
An hour after it first appeared, the CvK video was removed from the site. I did get to watch it once, but I can’t recall if it had any more content than what was edited for the video combined with JAJ.
Perhaps it will be reinstated some time in the near future.
Until then, the following is a text transcript of Christian von Koenigsegg’s comments in the combined video as featured on GM Europe TV.
CvKvideo.jpg Man with extremely smooth voice: This deal with Saab and General Motors is now going ahead. Why has it taken so long?
Christian von Koenigsegg: Actually, from our perspective we think we’ve moved quite fast. It was only about 8 or 9 weeks ago [that] we started getting into the process of looking at all the details of Saab. Now we have reached so far [to the point of signing] a SPA, a share purchase agreement, of which we’re very proud and happy to have reached this point.
We have great plans for the future of Saab and we’ll do our utmost to build an exciting, strong company and of course that’s good for the Saab employees as well.
MWESV: When people hear the name Koenigsegg they think of an extremely small manufacturer of high performance supercars and it’s a bit of a puzzle to understand how such a small company can take on Saab. How are you going to organise it?
CvK: We get that question a lot…..It’s actually not Koenigsegg, the supercar manufacturer who is buying Saab. It’s a company called Koenigsegg Group, where I personally, and the supercar manufacturer is a part of. But we consist of a group of entrepreneurs – Swedish, Norwegian, American – of course it’s a Swedish company but it’s an international base behind it. Within that group we have the strength and energy, and know-how and will to get this job done.
MWESV: Saab is a company that evokes a great deal of passion around the world. There’s a great deal of expectation hanging on your shoulders. What actually attracts you and your fellow investors to Saab?
CvK: It’s a very unique brand and it’s got a great heritage….. Sweden has the greatest number of innovations, per capita, in the world, and that has been seen through Saab’s history. You can see that with their products. We want to reinvigorate that, make it unique, Swedish, innovative, environmentally friendly and of course, fun to drive.
MWESV: So the deal is struck, but you know, of course, that the key for any car company is product – new product. So what new cars are we going to see from ‘new Saab’?
CvK: Well the first one coming out is already in the pipeline – it’s the new 9-5 – which I’ve personally driven and tested over the summer and I think it’s a great car. It’s very important for Saab’s future. Then we have the 9-3x which has just been launched, which is also a good compliment ….then we have a few other cars coming out in the near future which are in the pipeline, so to speak, I can’t get into too many details right now, but, we have a lot of new products coming.
MWESV: And there is the money on the table to make it all happen? A lot of people have been wondering about that, too.
CvK: Absolutely. money is an important factor and we’ve been working together with the Swedish government, GM and within our group to secure finance for Saab, and we’re well on our way, and it’s close enough for us to sign the SPA and [now] we have the next important step in front of us during the next months to get the whole deal done.
It is a huge challenge but it’s a rewarding challenge and we’re very confident that we’ll make this work.

Jan-Ake Jonsson on the Koenigsegg deal

The following is a transcript of a short video interview of Jan-Ake Jonsson, released by Saab today.
Man with extremely smooth voice: Jan-Ake, it’s been 8 weeks since General Motors and Koenigsegg signed a non-binding agreement over the sale of Saab Automobile. Now it’s gone one step further?
Jan-Ake Jonsson: Well, I’m happy to report that General Motors and Koenigsegg Group have actually signed a Share Purchase Agreement, which is a milestone in the developing new ownership structure and whereas there are still some issues to resolve that will be resolved in the next few months, this is a very important step in order to secure a bright future for Saab.
MWESV: Crucially, does it mean there’s enough money on the table for a viable Saab in the future?
JAJ: Well, of course, it is that securing a new ownership structure, together with financial support from General Motors and the Swedish Government – we have secured the future for Saab and developments for Saab, going forward.
MWESV: Will the conclusion of this deal secure Saab’s future, and jobs for the future at Saab, which [are both] very important.
JAJ: Well, the good thing about the business plan that we have developed, together with the Koenigsegg Group, is that there will be a strong focus on the activities presently in Sweden, which is the development of our new vehicles, as well as the manufacturing of our new vehicles and that is, of course, good news for the Saab organisation.
MWESV: Obviously these negotiations have been through General Motors… involved have you and your team been in the process?
JAJ: We’ve been fortunate to be a part of this process from the beginning, from the time we developed the prospect as well as the presentation to different potential buyers, as well as during the negotiation and the development of the business plan and up to this date, we have – at different levels – been heavily involved in all the discussions taking place.
MWESV: Back in February, Saab filed for legal reorganisation under Swedish law. What happens to that process now?
JAJ: The current extension of the reorganisation expires on August 20th and we have decided that we will not prolong that. We see that we have achieved everything we set out to achieve in our reorganisation plan, related to dimensioning the orgnisation properly, creating a better balance between supply and demand, reducing our inventory as well as restoring our balance sheet by achieving a composition writing down our debts by 75%, so now is the time to exit the reorganisation as we have achieved all of these objectives.
MWESV: So, new owners, new organisation, reorganisation – what does the future hold for Saab?
JAJ: Well, I think the future is very exciting. First of all, in the short term, we’re happy to report that we have a production schedule that is full over the next 7-8 weeks. At the same time we’re also starting the launch of our new products, starting with the 9-3x this summer, followed on with the 9-5 and this is excellent news for Saab….going forward. We have been fortunate through this whole process, and I know also in the future, to have tremendous support from all the people involved in Saab – whether we talk customers, dealers, employees – and I think everyone’s happy we’ve taken another important step into securing the future. So, we have to continue to work on what remains to close this deal but for the time being, I’m very happy.

The Koenigsegg deal for Saab – and the reaction

What a 24 hours we’ve had!

Things have moved to another level all together. I thought I’d whip up this summary entry to gather together all the various bits of news, the reactions and things we’re possibly still a little unhappy about.


The Deal

Koenigsegg have signed a Stock Purchase Agreement with General Motors to take Saab Automobile off GM’s hands. The details of the deal were not disclosed in the press release from GM, but several Swedish media sources claim knowledge of the deal.

I’ve not taken all the sources for this summary, as I believe some of them (*cough*bloomberg*cough*) are smoking some wackyweed.

The press release merely states that the deal is conditional upon some funding being provided in different ways – via support and guarantees from the government, transitional funding from GM, etc.

Basically, there wasn’t much, if anything, we didn’t know already.

The Swedish media had more juicy stuff, however.

– The price tag is basically zero, but GM has an agreement that allows them some profit if Koenigsegg can manage to get Saab back on its feet, says a person close to Saab.

Koenigsegg will receive a lot when the company takes over Saab Automobile, among others things:

GM will give up three quarters of Saab’s debts, or 750 million dollars.

Koenigsegg get the rights to produce the next generation of Saabs (i.e. 9-5 variants and 9-4x) for free. The value of this right is by analyst DN Ekonomi talked to estimated to around 2 billion dollars.

Saab will not have to pay back the money that GM supported Saab with during this years reconstruction.

Machinery and equipment required to manufacture the Saabs will be transferred to the company.

Some of the sources are saying that the Koenigsegg Group are putting in $100m. Others are saying that they still need another US$400m, which they’ll have to source from outside as it seems the Swedish Government won’t support them with a loan and the EIB money can only be used for green technology stuff.


GM ownership

Some reports stated that GM would retain a minority stake in stake in Saab, possibly in the form of preferential shares with limited voting power but retaining dividend rights if and when Saab are successful. Both the press release and a report from disprove this, stating that Saab will be sold 100% to the Koenigsegg Group.



Saab, as was thought earlier in the week, will exit reconstruction this week as part of their progression towards new ownership.


The players

I was informed last night that there would be an interview with Augie Fabela (the K-Segg Group Chairman) in the Swedish news today.

That hasn’t appeared online yet, though it may be in the print media. Hopefully something will be forthcoming soon as I’m sure this interview will address some of the stuff we’ve been interested in for some time, about the group and their plans for Saab.

Jan-Ake Jonsson and Christian Von Koenigsegg appeared in a video shown at GM Europe TV and in that, they addressed what this latest signing means, whether there’s adequate funding, who the Koenigsegg Group are, etc.

Whilst they did touch on those subjects, it must be said that it was a scripted event, without a chance for press questions.

Still, it was good, and reassuring, to hear something from the top.


The reactions

This day has been a long time coming and whilst it’s possible that you could still be a little frustrated by the timidity of the whole event, the significance of Saab and Koenigsegg getting this far should not be underestimated.

Of course, the Swedish press are underestimating it somewhat, with the repeated calls for Koenigsegg Group to ‘show them the money’. Commenters note the view from the press that all that’s happened here is another piece of paper has been signed.

That may be true, but I get the feeling that there’s been a truckload of stuff to get through prior to this being signed. As I said, it’s a significant moment. The due diligence is done, the plans are made, the belief is formed and the players have now committed to the purchase.

Jöran Hägglund, the Secretary of the Industry Ministry, and the man dealing with this whole affair from the Government’s point of view, outlines four more things that have to happen:

  • Koenigsegg must add (or disclose) more private capital
  • They have to get through the EIB loan process
  • They have to get through negotiations with the government on guarantees for those EIB loans, and finally….
  • The EU Commission has to approve those loans.

If they can line those particular ducks in a row, then we might have something to work with here.

Analyst Matts Carlsson states that the SPA being signed today puts some pressure on the government to provide the loan guarantees. If the companies have satisfied each other well enough to get to this point, then the government should perhaps do a little more to come to the party and be more of an enabler for the sake of Swedish industry (that’s my take on it, at least).

Jöran Hägglund on the Koenigsegg Saab announcement

The press release has been (finally) released.

There’s video of Jan-Ake Jonsson and Christian von Koenigsegg talking about the whole deal.

Now it’s time for the other player in this drama – Jöran Hägglund

Here’s a Googletrans from DI-se


Hägglund: Four step for Saab

“If all the pieces fall into place, it is a welcome step for the employees, Trollhättan, the region and the automotive industry. But there are many parallel complex processes going on simultaneously,” said Jöran Hägglund (C), Secretary of State at the Industry Ministry, at a press conference on tisdagen. He mentioned four steps. The most crucial is that Koenigsegg adds significant private capital.

“Automotive industry is the industry with the highest risk premiums in the market. While there is great potential.”

Other issues are negotiated with EIB loans. It is they who go through the company’s performance and determines the size of the loan.

Koenigsegg will also agree with Riksgälden on loan guarantees. Finally, the EU Commission approve the terms of the loan guarantees, said Jöran Hägglund.

The government has received a statement of ownership within the Koenigsegg. It now remains to securing the capital, says Jöran Hägglund. How large amounts involved, he does not want to comment on.

“There is significant amount but we want to be clear that it is not so that the taxpayers should go in and finance the deal between GM and Koenigsegg. Had it been so, we had gone in and bought the company from the very beginning.”

Under the deal Koenigsegg Group takes over all shares in Saab from GM, which means that GM completely leave its ownership position in the new Saab. It was previously speculated that GM might wish to retain a minoritetsdel of perhaps 10 percent.

TT: Why did it not so?

“I can not enter such details, but we have signed a aktieköpavtal which includes certain conditions of the agreement should be honored, and we expect it to be completed within a few months,” says Halldora von Koenigsegg, married to Christian von Koenigsegg and himself engaged in Koenigseggruppens business.

The most important condition is that the state guarantees a loan from Bank of 600 million U.S. dollars, around 4.3 billion. Is not the Swedish government in the affair, it may scupper the whole weight.

But GM also promises in the agreement now signed to continue to cooperate with Saab. The companies have, so to speak, the children of technology, as platforms and similar, for a long time.

This should be solved through licensing and service, explains in a press release from GM, Saab, and Koenigsegg.

“There are certain things that fall under GM’s commitment to make it an end in the store,” says Halldora von Koenigsegg to TT.

Funding is still höljt in a haze even if it purports to be resolved to 70 percent.

TT: How will you get the rest.

“The greater part is in port, it’s about 30 percent remaining of the funding will be covered up. It hopes to solve during the final phase of negotiations.”

Koenigsegg has to be as helpful as possible when it comes to present the total funding, “says Hagglund.

“It is not up to us to determine their business plan, but we want as far as possible avoid the risk of having to go into.”

If the amount of 720 million that the financiers themselves are reported to have invested in the deal with GM is big or small want Jöran Hägglund not comment. on the Koenigsegg-Saab deal

Dagens Industri will feature a full interview with Augie Fabela on the Saab deal in tomorrow’s edition (I don’t know if it will be online) but they’ve pre-empted this with a story about the deal, featuring some snippets of that interview.

The following is a full translation that was done for Saabs United by Carl-Henrik B. My thanks to Carl-Henrik!

It’s nice to see them accentuating the positive in the headline…..not.


“Still the billions missing in the Saab-deal”.
Updated: 2009-08-17 at 23.05.

Koenigsegg Group has signed a binding agreement with GM to buy Saab, reveals Koenigsegg Group chairman Augie K Fabel to Dagens Industri. He states that still there is 3 billion Swedish kronor (about 400 million USD) missing in financing.

After eight weeks of negotiations the parties have come to an agreement, states Augie K Fabela in an interview with Dagens Industri. According to other mediasources the deal will be presented during Tuesday. General Motors shall continue to act as a stakeholder in Saab and get preferences-shares with rights to dividends in the new Saab.

GM puts 2,8 billion SEK in preference-shares and together with an expected loan from the EIB of 4,3 billion SEK it’s about 3 billion to finish the deal.

“In a normal macro-economic world, it would have been easy to get banks to finance this. But in today’s world they do not” – says Augie K Fabela to the newspaper. Augie K Fabela reveals that he personally invests but doesn’t say by how much.

Koenigsegg Group shall invest 720 million SEK, writes the newspaper and refers to data from Saab in Trollhättan. The Norwegian Bård Eker and Christian von Koenigsegg also contribute with straws to the stack.

Any information from Saab Automobile in Trollhättan is not possible to get this evening.

The first comments will be provided by GM, and it is GM that determine when information should be provided” said Eric Geers, Information Manager at Saab Automobile, to TT (Swedish News Agency).

The reconstruction of Saab Automobile began in February after the owner General Motors stated that it takes it’s hand away from the Swedish company by the end of the year. According to a decision in Vänersborgs District Court the reconstruction should be finished on Thursday. If the deal between Koenigsegg Group and GM isn’t totally finished by then, the company can apply for an extended time period.

With the stock transfer agreement, which now appears to be the signed, Saab would be able to get out of reconstruction, which has meant that the company has had its debts to creditors forgiven by 75 percent. But parts of the funding thus remains still to be resolved. Saab’s application for a loan from the European Investment Bank (EIB) assumed that Saab must have government loan guarantees, and negotiations are underway with Riksgälden and the government must bless Saab’s business plan. The Board of Directorrs for the Bank (EIB) should consider the request September 22.

Augie K Fabela says that it received a clear support of the request for government guarantee from those involved in the issue by the government. We also recieved support from the government after our meeting last Tuesday with Secretary of State Jöran Hägglund,” says Fabel in the interview. TT searched during the Monday evening Jöran Hägglund (C), but he would not make any comments at that time.

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