Saab Reports – Mahindra ‘Confirmed’, Creditor Wants Out

In Court….

There’s a little bit of news on the Saab front today.

Via TTELA, via comments (thanks to Pingu)

One creditor (the financial company SVEA Ekonomi AB that has provided NEVS with loans during the year) has opposed an extension of the reconstruction. The reason is that they fear that there is no longer enough property at NEVS to secure the loans, since the property that was originally used for the loans (cars, etc.) are currently being sold off to fund NEVS’ operations. They also note that since the operations is now largely funded with other loans with special privileges, their loans will likely not be paid in the end in case of a bankruptcy later on.

The original report in TTELA is here.

A few more things must be noted to give this context, however…..

Firstly, this is one creditor speaking their mind on NEVS’s reconstruction extension. The court would take this creditor’s opinion into consideration, however they’re not bound to end the reconstruction because of this.

Secondly, and perhaps much more importantly, the committee appointed to represent the creditors group as a whole has written to the court in support of NEVS’s reconstruction extension. That will carry a lot more weight.

TTELA also write that a decision on the extension may be forthcoming today and that’s a pretty big deal because if the court says ‘No’ then all of Mahindra’s plans to talk to Saab AB about naming rights, finish off their due diligence, etc, go out the window.

Feel free to keep us updated in comments as I’ll be in bed soon.

——

Mahindra confirmed. Sort of.

Nasdaq.com – which is a real thing, not just an opportunistic guy with a domain name – is reporting as follows:

India’s Mahindra & Mahindra plans to take a stake in the company behind Sweden’s Saab Automobile brand, according to documents filed to a local Swedish court…..

…In a document filed to the court by one of the creditors of NEVS–a British consultant–Mahindra & Mahindra is named as the auto maker about to take a stake in the Swedish company.

NEVS, of course, have been very secretive as to who the potential investors are and while it’s never been confirmed by NEVS or Mahindra, the whispers have been all over the place.

NEVS do have obligations to their creditors, however, including the disclosure of information that will influence their decisions. I’m sure they disclose this information with instructions to keep it confidential, but our British consultant has seen fit to waive that particular request for now.

NEVS’s declined to comment. Of course.

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13 Comments

  1. At first I thought the creditors committee represented all creditors and acted like some sort of spokesperson for them the make administration a bit more efficient. But that is not the case since we here have one major creditor with a different opinion…

    1. I’m pretty sure that’s how it works, actually. It doesn’t stop someone from having a dissenting voice, of course, but my understanding is that the committee is intended to represent the majority view (not sure if that majority is worked out on ‘persons’ or if a creditor owed more gets a greater say)

  2. Interesting that the Nasdaq would offer that comment. As you note, it is probably a likelihood and not a fairytale if they are writing about it.

  3. Svea Ekonomie are owed 33Msek , according to ttelia. They are a lender, rather than a supplier, so their loans would have been secured by something tangible (as opposed to a supplier, who generally is the lowest creditor on the totem pole). This may explain why they are less inclined to let the reconstruction period extend.

    Secondly once this gets resolved, their lending role is probably done, whereas the supplier’s may have the possibility of an ongoing relationship.

    Also their point that Mahindra only has a letter of intent, subject to all manner of if/and/buts – is somewhat valid.

    I think the court’s decision could go either way .

    1. What surprises me is the apparent very open ended charge(Loan security) agreement Svea Ekonomie has over NEVS assets.
      One would have thought that when granting this type of loan/facility the lender would have made very sure their assets/security would be solid as a rock & yet here we have them saying;

      “since the property that was originally used for the loans (cars, etc.) are currently being sold off to fund NEVS’ operations” .

      NEVS up to quite recently had claimed on many occasions that they were still self funding and had cash & assets.
      Clearly as this sorrowful story continues to unfold, I have to wonder how they secured the SAAB automobile AB assets in0 the first place….

  4. does anyone know how much free cash Mahindra actually have?

    sort of admired Sweden from afar but the NEVS reorganisation process is a mess.

      1. There’ll be a LOT of zeroes on that number. Indian companies deal in lakhs and crores (Cr) as numerical units. A Crore is a unit of 10,000,000 and that cash balance you quoted would have been in Cr. So multiply by 10mil and then convert to your chosen currency.

  5. Maybe there’s an outside chance that we may be able to buy new SAABs again one day. In the meantime, I’ll keep driving the one I have- probably for a very, very long time.