Tag: Saab company

Writing of Saab’s potential

Greetings from England, where I’ve been fortunate enough to attend the Saab Owners Club of Great Britain annual meet. I’ll have a bunch of photos from the event in the next few days. Today, I’d like to point you towards an article that appeared in the Swedish press over the weekend.

I’d like to point out something I wrote last week in an editorial here at Inside Saab:

I still love this place and I still believe in this company. It’s exactly the same as when GM were considering shutting us down: there’s simply too much good stuff – brand, product, plant and people – for this [company] to be left to wither.

Brand, product, plant, people. To me, that’s what it all comes down to.

There are very few automotive analysts or writers willing to assess those elements of Saab’s operations in any detail. They have a tendency to skim over a few of them with a summary, essentially saying “brand=damaged and product=not enough” without looking at the whole company in any depth. The focus is purely on financials, which do have to be sorted out, no doubt. But a look beyond that would be welcome.

Discovered via SaabsUnited, I’d like to point you towards an article in Dagens Nyheter, a Swedish newspaper. In this debate article, the writer does manage to take this deeper look at Saab and expand on those four essential elements in some detail, finally saying in a Swedish newspaper some of the things that many of us who believe in Saab have been trying to promote for some time – Saab has some superb potential.

Click through and translate the full article online. If you’re familiar with the workings of this company, then I think you’ll find yourself nodding your head quite a lot.

A summary of the virtues discussed in the article:

  • Reach – Saab’s new deal with Pang Da has the potential – if each Pang Dab dealer sold just one car per week – to provide around half Saab’s required volume.
  • Technology and talent – Saab’s engineers have recently developed extraordinary tech that gives the 9-3 TTiD Griffin a full 180hp whilst keeping under the 120g/km emissions threshold. I’d like to add to that some of the technology under development and due to be seen soon: things like e-XWD and iQon. Saab also has a world-class design team led by Jason Castriota.
  • Partnerships – our engine partnership with BMW and vehicle development partnership with Youngman and Pang Da.
  • Range – Our range is bigger than it’s ever been and it’s only getting better. The cars themselves are constantly improving and the 9-5 and especially the 9-4x are getting fantastic reviews in key markets.
  • Brand – Our brand has taken some damage in the last few months/year, but remains very identifiable and strong. The author cites the Saab support convoys (world-wide gatherings 18 months ago when GM threatened to close Saab) as evidence of this.

There’s a lot more to the article, too. A glance is cast towards other niche carmakers that seem to survive pretty well, and a look towards other markets that have supported their car industries with assistive policies or actions (see below about a ‘bailout’).

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Both as an employee and as an enthusiast, it’s very encouraging to see an editorial such as this in the Swedish press. There is a strong fear in this market that Saab will turn out to be another instance like the shipyard corporate bailouts of the 1970s. Many people seem to be very negative towards Saab because of this fear but it’s encouraging to see someone looking at the potential within this company.

And having mentioned the shipping industry bailouts, I’m obliged to also mention that unlike the shipyards of the 70’s, Saab is not asking, nor have we ever asked, for a government bailout.

Brand, product, plant, people.

Given conditions that would allow the right investors to come on board and help this company stabilise and grow, we could make the most of all these elements of our company.

Update on Saab Automobile

Zeewolde, The Netherlands, 26 July 2011 – Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile) has delayed payment of the wages to its white-collar employees as some of the funds that were committed by investors were not paid in time to effect such salary payments. Saab Automobile is taking all necessary actions to collect these funds and continues discussions with various parties to obtain additional short-term funding so that the payments can be made.

Swan will update the market of any new developments.

Press Release: UPDATE ON STATUS SAAB SUBSIDIARY

UPDATE: An additional release from Swedish Automobile NV:

Zeewolde, The Netherlands, 22 July 2011 – Swedish Automobile N.V. confirms that Saab Automobile Tools AB reached agreement on payment terms with the supplier that filed for bankruptcy, thereby resolving the issue.

The original release is below…..

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Zeewolde, The Netherlands, 22 July 2011 – Swedish Automobile N.V. confirms that one of the suppliers of Saab Automobile Tools AB (Saab Tools) filed for bankruptcy of Saab Tools, a subsidiary of Saab Automobile AB. The District Court has received the filing, but has not yet rendered a judgement which is expected in a few weeks. Saab Tools is currently assessing the issue and aims to resolve the issue as soon as possible.

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Press Release: SAAB AUTOMOBILE UPDATE ON PRODUCTION

From Swedish Automobile NV

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Zeewolde, The Netherlands, 21 July 2011 – Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile) continues discussions with its supplier base on material supply and delivery terms in order to be able to resume production at its Trollhättan plant. Swan and Saab Automobile continue their discussions with parties to obtain further short-term funding to be able to restart and sustain production. As delivery of all parts needed to secure a production start is not yet agreed production will not resume on August 9 as intended and will be postponed until a full commitment on delivery plans can be secured.

Gunnar Brunius, Vice President of Production and Purchasing said:

“I am positive about the progress we made on the payment terms with our suppliers and it is good to see that we all want to make it work. What we need now is a full commitment on supply of parts into our factory to be able to restart production and secure a stable manufacturing operation. We are now working hard with our suppliers to nail down these plans, commit to a delivery schedule and start building the close to 11,000 cars that we currently have in our order books. The industry-wide summer break at our suppliers caused certain key suppliers not to be able to supply us in time. Saab Automobile hopes to restart production earliest in week 35 provided that it is able to commit to a delivery schedule with its suppliers.”

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Saab Making Progress

Strap in, folks. This is a long one…..

And for those of you who are unfamilar, here’s a summary of the deals done by Saab, Pang Da and Youngman in the last few months. It’ll add to your understanding of this post.

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Saab fans will know that it’s been a difficult few months for our favourite little car company. It’s been well covered inside and outside of these pages.

When you get news in bits and pieces with a whole lot of ‘analysis’ in between, it can be a little difficult to keep view of the bigger picture. What I’d like to cover today is some of the progress that we’re making on a few different fronts.

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Business

Our immediate problem has been short-term cashflow. Cashflow usually involves inflows from finance, investment and operating activities. It’s stating the obvious, but there has not been a lot happening in terms of operating activities in recent times. Building and selling automobiles is normally the backbone of Saab’s inward cashflow and we’ve been crippled by a lack of production in recent times. It’s why the situation went from bad to worse when we couldn’t pay employees for a few days at the end of last month, an instance which has since been resolved.

We’ve been working extremely hard during this time to build up our cash inflows through investment and finance activities and this is where most of the news has occurred in recent times. It’s not just for our immediate needs, either. One should look at much of this activity as long-term in nature, building our company to provide a greater base for future operations.

Continue reading Saab Making Progress

Press Release: Saab Automobile update on production and sale and lease back of Saab Property

Swedish Automobile N.V. (SWAN) announces that Saab Automobile AB (Saab Automobile) obtained final approval from the EIB, the NDO and the Swedish government for the sale and lease back of the Saab property.

The consortium of Swedish real estate investors led by Hemfosa Fastigheter, and including among others, Brinova Fastigheter AB, PEAB and Weland Fastigheter will purchase 50.1% of the shares in Saab Property AB for a total consideration of SEK 255 million, reflecting an adjustment to the transaction price for a one year lease free period. Of the SEK 255 million consideration, SEK 205 million will be paid in cash on closing and the remaining SEK 50 million in the form of a sellable bond convertible into shares of the purchasing company. The investors have the right to increase their commitment to SEK 300 million within 30 days after closing on similar terms. The parties will proceed to closing the transaction today.

With this transaction SWAN and Saab Automobile will have raised about EUR 61 million in additional funding commitments over the past weeks. Saab Automobile continues its discussions with its suppliers on materials supply and commercial terms and is close to reaching agreements. SWAN and Saab Automobile continue their discussions with several parties to obtain further short-term funding to be able to restart and sustain production, including completion of a drawdown under the EIB loan facility.

Given the fact that some of Saab Automobile’s suppliers require a longer lead time to resume adequate supplies and the delay as a result of the summer shutdown period at many of Saab Automobile’s European suppliers, Saab Automobile plans to restart production by Tuesday August 9, provided that the above criteria are met.

Summary: Saab deals with Pang Da and Youngman

Saab have made several announcements in regard to deals made with Chinese companies Pang Da and Youngman since mid-May. These deals have changed slightly in nature as each new announcement has been made and I thought it might be useful for those interested in Saab business to track the dynamic nature of the deals.

Please note that these are just dot-point summaries and not detailed examinations of the conditions associated with each deal. They are treated this way to quickly and easily present significant changes to the deals where these have occurred.

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May 16 – Initial MoU with PangDa

  • Memorandum of Understanding signed with Pang Da (non-binding)
  • Includes a strategic alliance consisting of a 50/50 distribution joint venture (DJV)
  • includes provision for a manufacturing joint venture (MJV) for Saab branded vehicles as well as for an MJV-owned brand (the so-called ‘child brand’) in China.
  • Saab Automobile will have up to 50 percent in the MJV, with Pang Da and a to-be-selected manufacturing partner owning the remaining shares.
  • Pang Da purchase 30million Euros worth of vehicles with an option to purchase 15mil Euro more within 30 days.
  • Pang Da to take 24% stake in Spyker (subsequently renamed Swedish Automobile) valued at 65mil Euros

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June 1 – Pang Da Advances additional order

  • Pang Da exercise option to purchase 15mil Euros worth of additional vehicles as per the May 16 deal.

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June 13 – Addition of Youngman to May 16 MoU

  • Youngman to take 29.9% ownership interest in Swedish Automobile, valued at 136mil Euros
  • Pang Da retain their right to a 24% ownership interest, however the cost of this 24% investment by Pang Da is raised from 65mil Euros to 109mil Euros because of additional equity to be contributed by Youngman.
  • Distribution joint venture moves from 50/50 between Saab and Pang Da under the initial agreement to a tripartite DJV – Saab 33%, Youngman 33% and Pang Da 34%
  • Manufacturing joint venture conditions change to see Saab Automobile and Youngman each have a 45% interest (Saab was to have a 50% interest under the initial agreement) and Pang Da hold the remaining 10%.
  • MoU is subject to conditions before being confirmed as a binding agreement. Agreement will be subject to regulatory approvals in Sweden and China.

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July 4 – Binding agreement on equity, addition of NPJV

  • Equity components of previous MoU now converted to binding agreements. These are still subject to regulatory approval, which all parties are working on and expect to receive in coming months.
  • Parties continue working towards execution of binding agreements for a strategic alliance consisting of a tripartite distribution joint venture and a tripartite manufacturing joint venture for Saab-branded and child brand vehicles in China.
  • Saab and Youngman make conditional agreement on a 50/50 new product joint venture (NPJV) that will see three new models developed – identified as Saab 9-1, Saab 9-6 and Saab 9-7. Saab will contribute design, development and testing expertise and Youngman will contribute finance.
  • Agreement on NPJV is also dependent on regulatory approvals, which is expected in a timely manner.

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I hope that helps to clear up the nature and current status of the deals, which have steadily increased Saab’s partnership with Pang Da and Youngman. As noted in the most recent release on July 4, this broad base and increased co-operation is expected to provide better conditions for the entry of Vladimir Antonov into the ownership group, which will only further increase Saab’s stability into the future.

Press Release: Swedish Automobile, Saab Automobile, Pang Da And Youngman Convert Non-Binding MoU On Equity Investment Into Binding Agreement And Agree On Additional New Product Joint Venture Subject To Regulatory Approvals

Trollhättan, Sweden: Swedish Automobile N.V. (SWAN) and Saab Automobile AB (Saab Automobile) today announced the signing of final agreements with Pang Da Automobile Trade Co., Ltd. (Pang Da) and Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman), thereby converting the non-binding memorandum of understanding relating to the equity investment of Pang Da and Youngman announced on 13 June 2011 into binding agreements subject to regulatory and other third party approvals. Moreover, Saab Automobile announces a conditional agreement with Zhejiang Youngman Passenger Car Group Co., Ltd. (Youngman Passenger Car) on the formation of a Sweden-based joint venture company for the development of three new product Saab models (NPJV).

The non-binding MOU announced on 13 June 2011 between SWAN, Saab Automobile, Pang Da and Youngman in terms of which Pang Da and Youngman will make an equity investment in the total aggregate amount of EUR 245 million in SWAN have now been incorporated in binding agreements, while the parties continue working towards execution of binding agreements for a strategic alliance consisting of a tripartite distribution joint venture and a tripartite manufacturing joint venture for Saab-branded and child brand vehicles in China. The agreements are subject to approval from relevant authorities. The agreements allow for the return of Mr. Vladimir Antonov as a shareholder/financier of SWAN and Saab Automobile which the parties expect as soon as the parties at interest have cleared him.

The NPJV will be 50 percent owned by Saab Automobile and 50 percent by Youngman Passenger Car, and forms the foundation for an expansion of the Saab product portfolio with three models which until now did not form part of Saab Automobile’s current and future product portfolio. As such the NPJV will focus on developing three completely new Saab vehicles: the Saab ‘9-1’, Saab ‘9-6’ and Saab ‘9-7’.

Within the development process of these three new vehicle lines, Saab Automobile will be responsible for controlling and managing the design, the development and testing process to the start of production and providing other necessary technical and quality control support. For this, Saab Automobile will source existing capabilities and expertise from its state-of-the-art technical development department in Trollhättan. Youngman Passenger Car will be responsible for providing the necessary financial investments in the joint venture.

The agreement on NPJV is also subject to approval from relevant authorities, which SWAN, Saab Automobile and Youngman Passenger Car hope to obtain timely.

Victor Muller, CEO of SWAN and Saab Automobile said: “I am pleased to announce the signing of binding agreements (subject to obtaining regulatory approvals) with Pang Da and Youngman, as it underlines the confidence of all parties in a successful tripartite partnership. Establishing the New Product Joint Venture is a major step for both Saab Automobile and Youngman Passenger Car and marks the start of an exciting new partnership. This joint venture offers Saab Automobile the opportunity to develop models that were not envisaged nor funded in our original business plan: for instance, we will now be able to develop a small entry level Saab, a car that has long been on the top of our wish list.”

Mr. Pang Qingnian, CEO of Youngman, added: “The agreement on the New Product Joint Venture brings together the best of both worlds, merging the industrial and financial strength of Youngman Passenger Car with the state-of-the-art technical expertise of Saab Automobile. The Saab ‘9-6X’ and Saab ‘9-7’ will be key to enhancing the prestige of the Saab brand to an even larger group of customers in China and the US, while the entry level Saab ‘9-1’ will appeal to urban motorists around the globe.”

Mr. Pang Qinghua, CEO of Pang Da, commented: “I am very happy to have signed binding agreements with our partners, which further feeds my confidence in a successful future for Saab Automobile. We were already impressed with Saab’s current and planned product portfolio to date and with the addition of three new Saab models, the brand will be even better positioned to meet demand in markets around the world and China in particular.

Press Release – Swedish Automobile Enters Into EUR 25 Million Convertible Bridge Loan With Gemini Securing Additional Short – Term Funding And Pays Employee’s Wages

Trollhättan, Sweden: Swedish Automobile N.V. (SWAN) announces that it entered into a EUR 25 million convertible bridge loan agreement with Gemini Investment Fund Limited (Gemini), thereby securing additional short-term funding.

SWAN entered into a EUR 25 million convertible bridge loan agreement with Gemini with a 6 months maturity. The interest rate of the loan is 10% per annum and the conversion price is EUR 1.38 per share (the volume weighted average price over the past 10 trading days). SWAN may at any time during the loan’s term redeem it without penalty and it intends to do so once the funding from Pang Da and Youngman is received, in which case no dilution as a result of this bridge loan will occur.

Upon receipt of Gemini’s EUR 25 million and upon reaching agreements with its suppliers on payment terms, Saab Automobile hopes to complete its scheduled loan drawdown of EUR 29.1 million from the European Investment Bank (EIB).

As a result of this convertible bridge loan (EUR 25 million), the sale of the real estate (EUR 28 million) and the sale of cars to a Chinese buyer (EUR 13 million), Saab Automobile (conditionally) secured EUR 66 million in additional funding this week. Assuming the receipt of these funds takes place as scheduled, Saab Automobile expects to have secured the liquidity required to restart production hopefully within 2 weeks, subject to reaching agreement with its suppliers which includes feasible delivery schedules.

Victor Muller, CEO of Swedish Automobile and chairman of Saab Automobile said: “I am relieved to report that we made the June salary payments this afternoon from the proceeds of the sale of cars we announced last Monday. We again extend our sincerest apologies to our employees for the hardship the late payment has caused to them. We have clearly gone through a very rough patch in the past few weeks and hopefully we can now reach agreement with our suppliers so as to ensure a resumption of our production in a controlled way. Our mid and long-term funding is secured by the Pang Da /Youngman agreements which are still subject to obtaining certain governmental approvals. Assuming these approvals are obtained, the Gemini bridge loan will be repaid in full.”

Press Release: Saab Automobile Have Reached Conditional Agreement For Sale And Lease Back Of Saab Property

Trollhättan, Sweden: Swedish Automobile N.V. (Swedish Automobile) announces that Saab Automobile AB (Saab Automobile) have reached a conditional agreement with respect to a sale of 50.1% of the shares in Saab Automobile Property AB (Saab Property) with a transaction value of SEK 255 million (EUR 28 million).

A consortium of Swedish real estate investors, led by Hemfosa Fastigheter AB (the Consortium), will purchase 50.1% of the shares in Saab Property for a total consideration of SEK 255 million, reflecting an adjustment to the transaction price for a one year lease free period. The property consists of 483,000 m2 building space. The investors have the right to purchase additional shares to increase the amount to SEK 300 million (EUR 33 million) on the same terms within 30 days after closing.

Saab Automobile will enter into a lease agreement with Saab Property for a duration of 15 years.

As joint owners, the Consortium and Saab Automobile seek to further develop the property, including a refinancing of the property at a later date when commercially feasible. Saab Automobile is being advised by Catella Corporate Finance.

In order to enable Saab Automobile to sell the property, the Swedish National Debt Office (NDO), being the guarantor of the EUR 400 million loan of the European Investment Bank (EIB), is requested to release its pledge in the shares of Saab Property. If the NDO releases its pledge in the shares of Saab Property, the guarantee of the NDO in favour of the EIB will be reduced by EUR 120 million. As a result, Saab Automobile will draw up to a maximum of EUR 280 million under the existing EIB loan (of which EUR 216.9 million have currently been drawn). A further EUR 63.1 million will remain available to Saab Automobile under the EIB loan. Saab Automobile seeks final approval from the EIB, the NDO and the Swedish government to complete the transaction which it expects shortly.

Swedish Automobile and Saab Automobile continue their discussions with several parties to secure additional short-term funding to restart production. There can, however, be no assurance that these discussions will be successful or that additional short-term funding will be obtained.

Jens Engwall, CEO Hemfosa Fastigheter AB, said: “We are very pleased with the agreement with Saab Automobile. We will continue to add value for Saab Automobile in developing the property.”

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