Swadeology

Press Release – Swedish Automobile N.V.: INFORMATION ON EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

I know we have some shareholders in SWAN and other interested parties who visit here, so this is important information for them. It’s also interesting for those business-watchers following developments with regards to the sale of Saab.

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Zeewolde, The Netherlands, 11 November 2011 – Swedish Automobile N.V. (Swan) provides further information regarding the sale of the Saab Auto Group and the Spyker business, including the further consequences for Swan.

1. Sale of the Saab Auto Group

On 28 October 2011, Swan entered into a memorandum of understanding (the MOU) with Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman) and Pang Da Automobile Trade Co., Ltd. (Pang Da) for the sale by Swan to Youngman and Pang Da of the shares that Swan holds in Saab Automobile AB (Saab Automobile) and Saab Great Britain Limited (Saab GB) for an aggregate purchase price of EUR 100 million. In terms of the MOU, the total purchase price of EUR 100 million will be paid in the following manner:

EUR 50 million upon completion of the sale
4 instalments of EUR 12.5 million payable on the first, second, third and fourth anniversary of completion of the sale

Final agreement between the parties is subject to a definitive share purchase agreement (SPA) between Swan, Pang Da and Youngman, which will contain certain conditions. Amongst others, these conditions will include approval of the transaction by the Swedish Government represented by the Swedish National Debt Office (NDO), the European Investment Bank (EIB), General Motors (GM), the National Development and Reform Committee of the People’s Republic of China (NDRC), the shareholders of Swan and several other organisations.

The agreement in principle is that any outstanding intragroup loans and other financial obligations between Swan, on one hand, and Saab Automobile, its subsidiaries and Saab GB (together Saab Auto Group), on the other, will be set off or written off in accordance with applicable law without any actual payment being due and payable. The draft SPA will also be based on the principle that Swan is to be discharged of all Saab-related obligations.

The MOU is valid until November 15, 2011; its validity is also contingent on Saab Automobile remaining in reorganisation. The parties are currently in discussion about the SPA. GM publicly indicated on 7 November last that it will not agree to the continuation of the existing technology licenses or the continued supply of 9-4X vehicles to Saab Automobile following the proposed change in ownership of the Saab Auto Group. Swan and Saab Automobile are currently in discussion with GM. Without the GM consent having first been obtained, it is uncertain whether the parties are in the position to sign an SPA before 15 November of this year.

An important consideration for Swan to enter into the transaction is the commitment of Pang Da and Youngman to provide long term funding to the Saab Auto Group. With Youngman and Pang Da as new partners, the basis for a successful re-start of the Saab Auto Group would be established.
Pang Da and Youngman have assured Swan that their investment in the Saab Auto Group is driven by a business rationale that includes a long-term strategy for the group.

2. Sale of the Spyker business

Swan announced on 29 September 2011 that it had reached conditional agreement with North Street Capital, LP (North Street), a US based private equity firm, to sell to North Street the Spyker sportscar business for a purchase price of approximately EUR 32 million.

Swan is currently in discussions with North Street about the sale of the Spyker business and definitive transaction documentation.

3. Consequences for Swan of the sale of Saab Auto Group and Spyker business

3.1 Use of sale proceeds

If Swan sells the Saab Auto Group and the Spyker business as currently envisaged, the total (net cash) proceeds will amount to EUR 132 million. The exact use of these proceeds depends on the negotiations with the different stakeholders of Swan (i.e. creditors, lenders, etc.). Based on the current situation, the proceeds of the sales will not allow Swan to meet all its liabilities in full. The management of Swan will use its reasonable endeavours to come to a settlement that is acceptable to all its stakeholders, in line with applicable law.

3.2 Future of Swan

The future of Swan will depend on the outcome of the negotiations with the purchasers of the Saab Auto Group (Pang Da and Youngman) and the Spyker business (North Street).

If Swan is not able to complete a sale of the Saab Auto Group or secure further financing for the Saab Auto Group, management will likely not be able to safeguard the continuity of the Saab Auto Group, which will have negative financial implications for Swan and its stakeholders and may result in the bankruptcy of the Saab Group.

If Swan is not able to complete a sale of the Spyker business, Swan may continue the Spyker business, provided that the necessary funding for that business can be obtained.

If Swan were to sell the Saab Group but continues the activities of the Spyker business, as it did before it acquired the Saab Auto Group at the beginning of 2010, it will focus exclusively on the Spyker business.

If both businesses are sold, Swan will consider all of its options (including a voluntary liquidation of Swan).

The fact that the required approvals are not yet secured and that there are currently not yet final binding agreements in place with the purchasers of the Saab Auto Group and the Spyker business leads to uncertainty with respect to the completion of the various transactions described above and thus the future of Swan and any settlement with stakeholders.

Below a best estimate overview of the liabilities of Swan per 31 December 2011 (unaudited):

Most important creditors (amounts in million EUR):

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11/11/11 – the Saab 9-1 that wasn’t

Saab have certainly had a decent run with concept cars over the years. I’d have to go back and do the math, but the number of new Saab concepts over the last 10 years or so, starting with the original Saab 9x, actually outnumbers the number of new Saab road-going vehicles over several decades. The concept-to-new-car ratio would be a nice one to address, but that’s a post for another time.

One of those Saab concepts was the Saab 9-X BioHybrid from 2008.

The 9-X BioHybrid was first shown at the 2008 Geneva Motor Show, where it actually followed in the footsteps of the Saab Aero-X two years earlier by winning the award for the best vehicle at the show.

Lead Designer, Anthony Lo, said at the time…..

The 9-X BioHybrid is a vision of what a future compact car from Saab could look like. It is designed to reflect the priorities of youthful customers who seek progressive looks, responsible performance and high-tech communications, all in a sporty, fun-to-drive package.

I distinctly remember Bob Lutz saying that if Saab were to build this car, it would be called the 9-1. We were all very excited to see the car, but it was the “IF” in Lutz’s statement that had the enthusiast community feeling a little deflated. Saab needed a small car and we all thought this could be it. Of course, as things turned out, Saab was up for sale less than 12 months after this concept was released. I guess Lutz knew that was possible when the car was shown, hence there was no commitment made.

So…. this is the car that could have been a Saab 9-1 if things had worked out differently. The only other Saab with a 1 in the model number was an airplane, so it seems appropriate to mark the 11/11/11 with a tip of our collective hat to this beautiful concept car.

This concept was joined later in the year by a concept called the Saab 9-X Air, a convertible version of the vehicle that looked absolutely amazing with the top down (though not so good with the top up). The Saab 9-X Air name was later dropped in favour of the name Saab 9-X Convertible.

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Saab 9-X BioHybrid:
Boosting Efficiency in Compact Design and Performance

The Saab 9-X BioHybrid concept is a vivid vision of what a future compact car from Saab could look like. It is designed to reflect the priorities of youthful customers who seek progressive looks, responsible performance and high-tech communications, all in a sporty, fun-to-drive package.

Exploring design themes from Saab’s award-winning Aero X and earlier 9X concepts, the 9-X BioHybrid also demonstrates the potential for ultra-efficient power from a 200 hp (147 kW), 1.4-liter BioPower turbo engine backed by GM’s next-generation Hybrid system. Projected combined cycle CO2 emissions of just 105 g/km on E85 fuel are testimony to the promise of this package.

The interior showcases an entirely new expression of Saab’s driver-focused cockpit design, together with innovative, seamless connectivity for personal nomadic devices and a rear cargo deck with a ‘low friction’ loading system.

Continue reading 11/11/11 – the Saab 9-1 that wasn’t

Saabosphere – links we like in the middle of this week

It’s a little unusual for me to do a Saabosphere in the middle of the week, but there were a few good things out there worth sharing.

Via Saabworld, here’s a great video from Autoweek.nl. They travelled to Trollhattan recently to have a chat with some Saab employees, as well as some of the locals. Their interviews gauged feelings about the recently announced Memorandum of Understanding with Youngman and Pang Da. It should be noted that the interviews were conducted before General Motors made their preliminary announcement of not supporting the deal.

The video is mostly in Dutch, however the interviews are conducted in English.

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Is it time for another poll?

Auto Express have also written a story about the Saab/Youngman/Pang Da deal, with their focus being on future Saab models.

They claim an image of the Saab 9-3 replacement vehicle in the story, however it should be noted that it’s not an official image and not one that we have any comment on. All images claimed or shown by magazines should be viewed as their own. We’ll show ours when we’re good and ready 🙂

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The Snap Up a Saab competition continues……

Seriously, if you’re within reasonable distance of Saab of North Olmsted and you haven’t submitted an application for Week 4 of this competition, you’re missing out on what is possibly your best opportunity to win a new Saab of your choice.

All it will take is a week’s hard work, showing the car around and getting your friends and connections to share the vehicle as well.

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Life with Saab has an interesting post about real-life fuel consumption figures in the Saab 9-5 TiD.

The author, Arild, has achieved fuel consumption figures under 5 liters per 100km. That’s 47mpg for you folks in the USA and 56mpg for folks in the UK.

That’s pretty darn good for a car with that much space. Sure beats the carrying capacity of a Yaris.

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And last but not least…..

A study of the modern history of the Saab front grille. Do you have a favourite?

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The process with China and preparing for GM continues

As you may have read in news reports earlier today, discussions are ongoing with our Chinese partners as we try to negotiate a solution that will satisfy all parties.

Reuters:

China’s Zhejiang Youngman Lotus Automobile Co said it still wanted to invest in ailing car maker Saab after General Motors said on Monday it would stop supplying components and technology if Pang Da Automobile and Youngman succeeded with their acquisition bid.

Youngman director Rachel Pang said on Wednesday the company will do “everything they can” to support Saab’s survival. She told Swedish news agency TT Youngman still wants to buy Saab.

“Of course we do. If you are afraid you cannot succeed in business. There are always difficulties. One has to find solutions, not just give up,” she was quoted by TT as saying.

And the Wall St Journal:

Saab Automobile AB said Wednesday that it is discussing a new ownership structure with its Chinese investors, trying to save plans of selling the cash-starved company after former owner General Motors Co. objected to the deal.

“The purpose of these discussions is to find an ownership structure that everyone can agree on,” said Saab Automobile spokesperson Gunilla Gustavs, noting that the proposed 100% Chinese ownership “was an issue for GM.” Ms. Gustavs didn’t provide further details of the discussions.

From an internal point of view here at Saab, we continue to pursue all of our current objectives, which include but aren’t limited to these discussions.

Since GM’s statement on Monday night, we continue to work with Youngman and Pang Da to prepare to respond to GM’s questions on the proposed sale transaction of Saab Automobile AB to Pang Da and Youngman.

The Saab management team is preparing an in-depth communication package that clarifies the new business plan and the intentions for the future. The purpose is to present this to GM and clarify the intentions with the operations in China, thus seeking GM’s consent for the transaction through discussion and negotiations.

In parallel, the other processes continue, both those regarding approvals and those referring to the reorganization. Project Cheetah goes on as well, with the aim to create a new cost structure for Saab next year.

We had a setback, but in the Saab tradition, we keep moving on toward the goal. If our recent dealer tours through Germany and Austria are anything to go by, then the product and the customers demand it.

How did you end up buying your first Saab?

Something to pass the time……

A story from earlier in the week prompted a few Saab purchase stories from the pre-internet days. Forgetting the internet for a moment, it’s always interesting to hear how people first get into Saabs.

I received one such story via email but I haven’t sought permission to share it here as yet. I’ll do that shortly. In the meantime, I thought I’d reminisce a little……

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The archives of my first Saab website, Trollhattan Saab, are out of action at the moment. If they were operating, you’d be able to read about my first Saab experience in a mid-1980’s Saab 9000 at 200kph. I’ll re-write it one day.

That experience, in the very early 1990s, got me thinking about Saab. I was in no position to buy one, but rather than lampooning them as I did with many European cars during my misguided youth, I started to look for them.

I finished my university studies at the end of 1997 and got married (first time) the year after. Let’s just say that my first wife was not exactly a car person and it took a reasonable amount of arm twisting and good behaviour before we had a consensus that it would be reasonable to start looking for a ‘fun car’ for me. She had a Toyota Corolla at the time and I had a rotating garage door that saw several different Fords and Holdens from my employer of the day – hardly inspiring stuff.

This was the late 1990s and there were quite a few Saabs advertised back then. Tasmania actually had one of the best per-capita Saab dealerships in Australia during the 1980s and early 1990s, so the local stocks were pretty good. I can remember testing a magnificent blue Saab 900 Turbo, with a blue velour interior. It was a very early model, perhaps 1980 or 1981 and I was stunned by how much fun it was to drive (it had been around six years since my first experience in the 9000 – a long time between drinks).

I also tested a Saab 9000 Turbo in Rose Quartz metallic, with a dark red interior. It was like being in a mobile gentlemans club. I loved it, but it was well out of my very shallow price range.

That consensus opinion led to me having an allocation of only a few thousand dollars, but I wasn’t discouraged. I ended up perusing the newspapers on Saturday mornings, when the local rags had their classified listings. One particular Saturday, a dismantler had an ad for a Saab 99 in the paper – a complete running car that he wanted to sell rather than break up.

The car turned out to be a red Saab 99E from around 1972. It had the blue badge on the silver grille and given that it was being sold by what we call a “wrecker” here in Australia, you can imagine that it wasn’t presented in pristine condition. In fact, it was filthy.

The dismantler did some mechanical work on the side and the owner of the car was an elderly lady who was a client of his. He’d worked on the car for a few years and assured us that it was in sound condition. Time for a test drive, then….

A little bit more context is needed at this point. Please remember that I’m talking about Tasmania in the late 1990s. The closest thing to a computer in my possession at that time was a first generation Playstation. I had no point of reference for an early Saab and scant knowledge of the company’s history. To me, based on the Saab 900 and 9000 Turbos I’d driven, all Saab were wonderfully well equipped and quite fast.

As it turned out, a 1972 Saab 99E with a single-carb, 1.85L engine and an automatic transmission is nothing like a turbocharged Saab 900 or 9000. The car was as slow as a wet week and I refer you to my earlier comments about its presentation. There wasn’t a lot to get excited about, to be honest.

BUT….. it had oodles of character and despite the problems getting it started, it did get down the road OK (eventually). I wasn’t getting the Saab experience that I’d counted on, but I was definitely getting a Saab experience. And after so many months of wanting a car to play around with, a car with character, I decided to negotiate a price and we eventually took the car home.

My first wife and I didn’t get along that well in the end, but the demise of our marriage had nothing to do with sub-standard cleaning skills. We got the little 99E home and proceeded to pull apart the interior and she worked absolute wonders in stripping the insides and cleaning up every little nook and cranny. I felt a little bit ashamed at how much more thorough she was, compared to what I would have been. I took care of the exterior and I have to say, the car shone like some sort of miniature Swedish fire engine by the time we were done with it. The transformation was absolutely amazing.

As mentioned earlier, this was right at the beginning of my professional career, post university, and well before the digital age that we enjoy now. Thus, there are no wonderful digital images for me to post here. Somewhere there are a couple of blurry images from my old 35mm camera, but I couldn’t find them for this piece.

It looked quite a bit like the one to the right, except it was the first year of the black-bumper models and had square headlamps instead of the round ones shown here. The car had a red velour interior and the headrests shown in that image (the funkiest headrests EVER!). There was no center console under the dashboard, which was great for spreading your feet out over longer distances.

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We had a pretty good, albeit short time with the little red 99. My now ex-wife took it to work one night and on the way home, she did some damage that seemed uneconomical to repair (this was not the reason for the separation and divorce, I might add).

In hindsight, I think we could have fixed it, but it would have meant pouring quite a bit of money that we didn’t have into a car that we didn’t really appreciate the true value of. If only I’d known then what I know now.

The demise of the Saab 99E saw my buy an Alfasud Sprint – another short-lived ownership story thanks to a terrible cooling system – and then my turbo journey began with my first Saab 99 Turbo.

But that’s a story for another time……

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If you’ve got a first-Saab purchase story to tell, please do get in touch. It’d be great to share a few more of these.

And pictures would be wonderful if you’ve got them 🙂

Photo competition for Saab Dealer Tour of France

A couple of our enthusiast websites are running a photo competition for the Saab Dealer Tour of France that is commencing on the weekend.

If you’d like to go along but you haven’t seen the dates or venues yet, you can see them at the following link: Saab Dealer Tour – France.

Saab Actu and Saablog-in will co-host the competition with support from competition sponsors: performance partners Hirsch Performance and Saab scale model sellers, Dimini.ch

Saablog-in & Saab Actu – along with with Saab Automobile France, Hirsch Performance and Dimini.ch – invite every French Saab fan attending the Saab Tour de France to send in their best pictures of the event.

The 10 best photographers will receive some great awards!

Aspiring photosnappers should make sure they attend one of the Saab Dealer Tour – France events and then send their photos in to Remi from SaabActu, via email to remi.saabactu-at-yahoo.fr (replace the -at- with @, of course).

The autoextremist on winners in the car industry

I’m a regular reader of many automotive columnists and this week’s Rants entry from the AutoExtremist caught my eye. The article is actually about Toyota and the troubles they’ve suffered in the last few years – some of which were self-inflicted and some of which stemmed from natural disasters.

In talking about the focus needed for success, he mentions the following:

…..there are two ways to arrive at that profitability. The right way, and the wrong way.

The wrong way is to lose your focus, churn out products that lack integrity and aren’t true to your mission, and push for short-term profits above everything else. The companies that choose that path ….. suffer deep consequences for their shortsightedness and loss of focus.

The right way is to build outstanding machines, first and foremost. Vehicles that bristle with leading-edge design and exceptional, innovative engineering that are built with integrity and just the right amount of connectivity. Vehicles attuned to customers’ needs and wants yet imbued with the manufacturer’s personality and above all else are flat-out fun to drive.

Much has been made of our desire to build Saab Saabs once again and it’s something we’re very much on the road to doing. We’re extremely proud of the vehicles that we developed after our former owners renewed their attention on us back in 2005 (when the Aero-X was developed, the revealed in 2006).

But were very excited indeed about the opportunity to show off what we’ve been able to do on our own, with the replacement for the Saab 9-3. Reading the AutoExtremist column earlier today got me thinking more about that. Everything he mentions in that final paragraph above has been a focus in the development of this car and I guess you could say our current circumstances tend to focus your attention on what could be – if things go the way we think they should.

We don’t want to be Toyota sized, or anyone-else-sized for that matter. We just want to build the best damn Saabs we can and sell them to happy customers.

To quote another favourite AutoExtremist saying of mine: the car industry is, has always been, and always will be about one thing – the product.

Update from the Saab dealer tour of Austria

Things have been moving along with the Saab dealer tour in Austria and it looks like they’re having a great time, showing off the Saab 9-5 SportCombi and Saab 9-4x to both dealer staff and potential customers.

Despite the current uncertainty, it feels great to see stuff like this happening, and the positive response it’s been receiving.

The crew in Austria sent through the following updates:

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November 7

In Carinthia, in the south of Austria, a lot of interested people and Saab fans came to see the cars.
The Eisner group in Carinthia put in a lot of effort to offer a good insight in the new range for everybody. Although the questions about Saab are many, the spirit of the event is the same everywhere. Each stop offers individual conversations and contacts.

A highlight for us was the first visitor who didn’t come from Austria or Germany. A guy from Holland who has a second residence in Austria came with his 900 convertible (with the top open!) and had a look at the new models. We had very positive conversations again.

Even a bit of rain could not change the atmosphere the next day and the tour could go on.

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At the Winter dealer showroom in Graz, Styria, we were expected and welcomed. After a little snack for us we were able to present the 9-4X and the 9-5.

The highlight at this dealership was that one customer spontaneously signed a contract for the purchase of a new 9-5 SportCombi!

Mr. Heinz Kuss from the dealership Winter and Mr. Stefan Mladek complimented the customer on the first purchase.

Just before the day ended a Saab fan from Slovenia arrived. He drove a long distance to see the new range. Although he didn’t get to spend a long time with the new Saabs, he agreed that the drive was worthwhile.

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November 8

After the news from yesterday evening, the interest from the visitors on the Austria dealer Tour was bigger than ever. In the morning at the dealer Auto Stahl we received some concrete requests from customers.

The event was topped after midday at the biggest Saab dealer in Austria, Saab Wien Oberlaa. Its the only dealer in Austria that sells only Saab vehicles.

Nearly 150 people came to see both cars. A lot of price lists and product information was distributed and visitors took them home with pleasure. Some people decided to take a Saab and will follow the coming decisions between Sweden and China very closely.

This day was also a big day for the employees of Saab Oberlaa. They were able to talk about the new cars with customers in a comfortable and positive atmosphere.

We appreciated being able to meet a very special guest: Mr. Linz from China! He has driven Saabs for a long time and at he was in Vienna for private matters when we met him. He was very interested to see the new models and he had some special parting words to share: ”In China Saab has always been a special brand, we are proud to assume an alliance with this Swedish company!”

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Remaining dates and venues for the Austrian tour…… click to enlarge.

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Waiting…..

I apologise if the lack of writing here today has been a cause for concern. Simply put, there was nothing I could say. I had my own thoughts, of course, but they were best left unpublished, especially on an official site.

For those who haven’t caught up with the news…..

Back when our Chinese partners made a low offer to purchase 100% of our operations, Victor Muller suggested that it would trigger a change of control clause that GM and other partners would have difficulty with. The more recent, higher offer, did actually trigger that clause, meaning that GM had to give their blessing to the deal. As of yesterday, GM declared that they do indeed have difficulty with it.

“Although General Motors is open to the continued supply of powertrains and other components to Saab under appropriate terms and conditions, GM will not agree to the continuation of the existing technology licenses or the continued supply of 9-4X vehicles to Saab following the proposed change in ownership as it would not be in the best interests of GM shareholders,”

So that’s where we’re at right now.

Various parties sit at tables and try to find a solution that everyone can live with. Again, there’s no more that can be said about it right now because it’s still in progress.

The ramifications are quite significant, of course, so we hope that the parties to the discussions take part in good faith and with a long-term view.

There’s no reason why Saab Automobile has to succumb to the circumstances that have plagued it this year. As I mentioned a few days ago, Ford managed to get a similar deal done to give Volvo a future. I think it can be done here, too. We still have a lot of very good reasons to be here in this industry. If there is goodwill in the room, there will be a way to work this out with an agreement that will work for all concerned.

Until then, we stay tuned.