Swedish delegation back from the China trip

I’ve found three articles on the net talking about the Swedish delegation that visited Youngman in the last days. What they say is quite promising and shows that Youngman has a genuine intention regarding Saab and its future.

I would like to comment those three articles chronologically, as it shows how the story has developed.

The first of it is from just-auto.com and is from Thursday January 19. (thanks to mnztr for the link)

Read moreSwedish delegation back from the China trip

Why are Youngman so keen on Saab?

Last week autonewschina.com featured an interesting piece written by their managing editor, Yang Jian. It gives a few insights how Saab is seen from a Chinese view. It also indicates that Youngman’s interest in Saab in not that fresh, they already looked at the brand for quite a while.

Why are the Chinese so keen to acquire Saab?
Yang Jian | 2011/12/16

SHANGHAI — Once again, liquidation looms for Saab Automobile AB as a Swedish court decides whether to end the company’s credit protection.

And once again a Chinese suitor — this time Zhejiang Youngman Lotus Automobile Co. — is trying to save the brand.

This week, Youngman wired $5 million (32 million yuan) to pay Saab’s immediate tax expenses. Earlier this year, Pang Da Automobile Trade Co. paid 401 million yuan to buy a fleet of Saab vehicles.

But why are these companies so keen to acquire the deeply troubled Swedish brand? The answer is that Pang Da and Youngman understand the value of a global brand.

Read moreWhy are Youngman so keen on Saab?

Taxes paid

ttela.se reports that Saab has paid the taxes and fees, which is another step that needed to be done before the court decisison and is proof that things are moving.

Saab has now gotten rid of their debt applicable taxes and fees.

– They have paid their VAT now, says Margareta Ahrbergen, duty officer at the National Tax Board, said.

Morning Update – Work Continues

Yesterday we faced a real rollercoaster: from the report that Saab would file for bankrupcy to the notice that Youngman would send money to pay taxes and wages. I can assure you that Victor is devoting every minute of his time to work things out. It is not done yet, the most crucial thing right now is that the money Youngman promised to send arrives at Saabs accounts. But since Rache Pang was that close to the events I think she has understood that Thursday is a serious deadline.

ttela.se give us a short update on how things look now:

Saab CEO and Chairman Victor Muller was yesterday in Stockholm where he met with National Debt Office.

– They sit in meetings now, said Unni Jerndal, CIO at National Debt Office at half past six yesterday evening.

And at least work with the National Debt Office shall according to sources at TTELA have gone well. But a crucial question seems to be on Chinese Youngman deliver on their promises or not. TTELA wrote about the negotiations last week, which found a possible ownership solution that also included a large bank in China. Among other things, it is about placing the technology and the development of a separate company that is half-owned by Youngman. This arrangement would have a better chance of getting a hearing from the various parties to approve a deal. The aim is still to solve for the EIB loan in the long run.

Read moreMorning Update – Work Continues

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.

Read moreDecision Week – Continued

GM: No.

That’s the news in from pretty much everywhere at this point, Swedish Radio, TTela, and directly from Victor. Sorry if this is short as I’m writing this post from a phone.

Here’s what we know:

  • NSC was contacted to see if they would still be part of a share agreement that GM is comfortable with, all indications are that they’re done.
  • Multiple sources tell us that Youngman is trying to set up a deal where they take convertible preference shares and are allowed to inject liquidity into Saab for a period of time until Saab can be GM-IP free. It might look something like the current GM shares.

What happens next is anyone’s guess. This deal went from being manageable to insane, and we’re now in very murky waters. I’m not optimistic, but until Victor gives up trying, Saab lives another day. Hope for the best, prepare for the worst.

Decision Week

On Sunday we got to report about a new deal that was negotiated in Stockholm between SWAN, Youngman and, as a new partner, a bank in China. Honestly I had expected more positive news yesterday but obviously not everything running smoothly.

There have already been reports that GM is not fond of that new plan, but if we listen carefully to James Cain we learn that no decision has been made on that new proposal. Actually he said that it has not been worked on. I’d believe that they are just not finished yet because such a plan may be a lot to read. So hold your horses about that one, James will surely inform us when they are done. Still, I hope it will be soon as time is running out.

Some may see that bank in China as a placeholder for Youngman, who may want to buy those shares in a few years time. May be true, and this is how those deals are often done. It should be ok for GM if the bank is in until GM’s license agreements run out. As I already said yesterday, the fact that then bank is above the 20% barrier should not matter because it is not a competitor, just a strategic investor.

Pang Da stated yesterday that they are not out of the game. I wonder why they were not included in the plan that surfaced on the weekend but maybe they could be the party in the game who can help to get all involved parties below those 20 % hurdle. Just a thought.

Other news stated that Guy Lofalk is about to end the reconstruction. Well, this may be nessesary if no money comes into Saab. Youngman is dedicated to inject enough cash to continue reconstruction and pay the wages but I can imagine that they wait for a positive sign from GM. They don’t want to sink even more money into Saab without seeing a chance to get the deal through. I don’t know if the NDRC told them to stop or if they are just cautious.

Either way – we need the plan to be approved by GM so that Youngman will inject the funding and reconstruction can continue. And it is needed now, not in a few weeks. Everybody has to be aware of that.

The other thing is the critics that arise when it comes to Lofalk. I’ve had my say on this, I’ll leave it here. Just: please Mr. Lofalk, pull yourself together, do your job and help to find a solution.

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.

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