Zeewolde, The Netherlands, 12 September 2011 – Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile) signed a technology license agreement with a special purpose vehicle named Swedish Automobile coöperatief U.A. (SPV). The license agreement relates to the non-exclusive rights in Saab Automobile’s Phoenix architecture technology for a consideration of EUR 70 million.

As part of the transaction, Youngman has also signed a technology license transfer agreement with the SPV on purchasing the license and providing a guarantee for its payment of the license. This commitment of Youngman and the technology license agreement between Saab Automobile and the SPV are part of a bridge financing transaction. This bridge financing transaction and receipt of funds by Saab Automobile are still subject to finalization of definitive transaction documentation with the lender that will provide the bridge loan.

It is the intention to repay the bridge loan with the proceeds of the EUR 245 million equity investment of Pang Da and Youngman, which is still subject to approval of the relevant authorities.

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  1. Lets hope today brings some good news!!

    also a thought going out to the SAAB employees it must be tough but hold in there we will get through this .
    SAAB UP!!!!!!!

  2. Things are sloooowly getting better… Amid all the negotiations ongoing, there is one thing I can’t understand. According to the latest financial reporting, Saab holds inventories for about EUR 250 millions. Since Saab is famous for its lean manufacturing, I doubt that those inventories are to a large extend built of components and work-in-progress; means it must be vehicles ready to be sold (say, at least half of the amount). If company is desperately seeking cash, and its future is dominated by investments, why not to aggressively push those cars, even at notably discounted price tag? Needless to say that at least Saab is losing money on storing its inventories, so discount does not seem that crazy. That could generate some positive cash flow quite shortly to repay salary bills and the most outstanding payable to vendors; external funding  would then be invested into production restart and R&D (i.e. new 93). What’s wrong in my assumptions?..

  3. I have understood that the Chinese approval process has succesfully taken the first two steps, i.e. on regional and provincial level. The only “hurdle” seems the final approval on national level. I understand that by collaterizing the Phoenix IP, as contemplated by the above transaction, a EUR 70 mio advance can be obtained short term. The fact that Youngman has agreed to enter into this transaction proves that it is conficent that it will obtain the NDRC approval to enter into the JV. Considering all this, I agree with Victor that the district court may have misjudged the situation. The fact that the Swedish government is willing to speak to the Chinese government on the approval process and see whether it can be speeded up, are positive signs. I sincerely hope that the appeal court will assess these developments as I do and will rule favourably for a reorganisation. Youngman and Pang Da would not take these steps if they would not believe in the SAAB business case. As Victor last said, SAAB is the only independent European premium carmanufacturer left. In short, a solid asset base.

    1. Hi Robert! I actually can’t help pinpointing that (1) Swedish government jumped into the boat after the initial court rejection of Saab filing for protection and (2) the EUR 70 mio deal also occurred after the rejection, not before. With this said, was it a misinterpretation by local court, or they indeed lacked confidence in so many tentative deals committed but not processed yet? With these two consequential announcements appeal court really has an improved situation to judge about, if compared to what was in place a week ago.

  4. Looks very hard for SAAB to make it now since union filled for bankrupcy. Hope you make it but I only give you 20% chance. 🙁

    1. Hi Nick! I have similar concerns, yet we need to consider that filing for bankruptcy is not the same as bankruptcy execution. I’m by far not an expert in that field, but at least there must be a separate court trial and judgement to be made. If by that time Saab manages to sort out the outstanding salaries’ issue, chances for survival notably increase

    2. There’s really no point with giving probability numbers. There’s just one SAAB case, not one hundred. So it will be success or failure, not something like “out of our 100 SAAB companies, 20% succeeded”.

      Let’s hope SAAB will succeed!

  5. Wow, the first good news in quite some time.  Now, let’s pay the employees and pull Saab out of bankruptcy.  I’m looking forward to more good news in the future.