Decision Week – Continued

This is the morning after here in central Europe. I did not get too much sleep as I have been chatting with people from different time zones until I literally fell asleep besides my MacBook. The renewed “no” from GM has been a hard hit for Saab and all who are close. We’re surely in high danger of running out of time but still, this does not have to be the end for our tiny Swedish carmaker. Rest assured that Victor is still pushing to explore all opportunities excluding giving up.

The biggest problem right now is time. Reconstruction is in a critical phase. Fresh funding is badly needed to pay salaries and to fund the company for the next few weeks. This would be Youngman’s part and I am not really sure if they don’t want to take the risk of investing even more or if they have certain restrictions from for example NDRC not to put more money in until a successful deal is reached. The fact that they continue to work on a solution and that they are obviously willing to step back in their share shows that they are pretty dedicated to getting a deal done.

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Press Releasse: Swedish Automobile Continues Discussions With Youngman

Trollhättan, Sweden: Swedish Automobile N.V. (Swan) announces it is in discussion with Zhejiang Youngman Lotus Automobile Co. Ltd. (Youngman) and a bank in China about an equity interest in Swan. The discussions include a short term solution to enable Saab Automobile to pay the November wages and continue reorganization. The outcome of the discussions is still uncertain. Any possible transaction would be subject to the approval of the relevant stakeholders.

Swan will keep the market informed of any developments.

This just confirms what we have heard yesterday. Now we have to wait for GM and the NDRC to approve it. I hope for the Saab employees that the short term solution is not also awaiting approval.

The Deal

Monday again, and finally we have something to report. Yesterday news broke that a new ownership structure has been reached to give Saab a lifeline. No real new facts in this post of mine, I’ll just add my few cents to what we now know. Things have turned out in a different way as I had expected a week ago to see NSC going for Saab, but then again Victor always has a trick up his sleeve. Still, the general plan to bring up a third party to cover the stake Pang Da and Youngman can’t get is there, just with slightly different players.

So let’s take a look at the basic info we got confirmed yesterday. Here’s the new ownership structure again:

SWAN: 50.1%
Chinese Bank: 29,9%
Youngman: 19,9%

First thing one would ask is where Pang Da has gone. I always emphasized that they a are a car distributor and their main goal always was to be exclusive distributor for Saab in China. That’s nothing you need a stake in Saab for, though it would give a distribution contract even more value. Besides that it has been reported a few weeks ago that they spent lots of money on supporting lease deals so there is quite a bit of work to be done at home for them. Could be another reason for them to step back and let the deal happen as the return for their investment, pre-paid cars, will come with that deal anyway.

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Press Release: TRADING UPDATE SWEDISH AUTOMOBILE N. V. (including SAAB AUTOMOBILE AB) THIRD QUARTER 2011

TRADING UPDATE SWEDISH AUTOMOBILE N.V. (including SAAB AUTOMOBILE AB)
THIRD QUARTER 2011

Zeewolde, the Netherlands, 18 November 2011 – Swedish Automobile N.V. (Swan), a holding company that owns
subsidiaries which produce and sell premium automobiles under the Saab and Spyker brands (together referred to as the
“Group”), today issues a trading update for the third quarter of 2011 ended 30 September 2011. The Group is listed on
NYSE Euronext Amsterdam (ticker symbol SWAN).

KEY DEVELOPMENTS

  • Saab Automobile AB, Saab Automobile Powertrain AB and Saab Automobile Tools AB (together Saab Automobile)
    entered voluntary reorganization under Swedish law
  • Longer term future and stability for Saab Automobile expected after signing of a memorandum of understanding with
    respect to a EUR 100 million conditional agreement on sale of all shares in Saab Automobile and Saab Great Britain
    Ltd. (Saab GB) to Pang Da Automobile Trade Company Ltd (Pang Da) and Zhejiang Youngman Lotus Automobile
    Co., Ltd. (Youngman)
  • Conditional agreement reached on sale of Spyker Automotive business to North Street Capital, LP with net proceeds
    for Swan of EUR 32 million
  • Efficiency improvement initiative launched as part of voluntary reorganization process, in order to create more
    flexible and competitive cost structure
  • Finalizing voluntary reorganization process, implementing revised business plan and restarting sustainable production
    top priorities for Saab Automobile management
  • Sales performance seriously affected by production stoppages and tight liquidity situation during third quarter

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Friday Snippets: No Deal Yet

Updated to reflect Victor’s statement to WSJ that the 54% share deal for the Chinese is “off the table.”

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.

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SWAN EGMS will be held today

Today 11/11/11 the extraordinary Extraordinary General Meeting of Shareholders of Swedish Automobile (SWAN) will be held in Zeewolde.

Ttela.se cite Ms. Gunilla Gustavs saying that it will be a closed meeting, so maybe we won’t hear anything from what will be discussed there, but as far as we have some information, we will post it here.

The EGMS was planned back in September in order to make the needed changes in the SWAN structure to adopt the new part owners Youngman and Pang Da. On November 1st and after the new MoU from YMPD the EGMS changed its agenda and the EGMS was meant to be used to explain the Shareholders of SWAN what the Sale of Saab means

However, the EGMS will still be held on 11 November. At the EGMS, Swan will give shareholders further information about the structure of the new transaction with Pang Da and Youngman, and will discuss that transaction with shareholders.

Source: Swedish Automobile

But, this is also obsolete by now.

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