So you’ve seen the press release – Our administrator, Guy Lofalk, will file documents today, to end the reorganisation process that we’re currently involved in.
The District Court has registered Lofalk’s application, which has now been posted on their website.
Saab, as well as the creditors who were present at the creditors’ meeting and those included in the Creditors’ Committee, will have the opportunity to express their views before the District Court announces a decision. On their website, the Court writes that Saab’s deadline expires on December 15, at 1 pm. The District Court intends to issue a decision on the matter on December 16, at 2 pm.
Right now, intense negotiations continue with our Chinese investors in Stockholm, negotiations that are intended to strike an arrangement that will enable Saab to continue the reorganisation process and ultimately, continue operations into the future.
This decision from Mr Lofalk is not necessarily the end for Saab. He is under legal obligation to take to this step given the current situation as he sees it. However, that does not stop Swedish Automobile from seeking to put arrangements in place that can sustain Saab through a full reorganisation, and beyond. This is what we are seeking to do right now.
Saab will seek a continuation of the reorganisation process, with a new administrator appointed in Mr Lofalk’s place.
As always, we thank you for your continued support of Saab and we will keep you informed when we can.
Zeewolde, The Netherlands, 7 December 2011 – Swedish Automobile N.V. (Swan) announces it has been informed that the administrator of the reorganization, Mr.< Guy Lofalk, will apply for termination of the voluntary reorganization of Saab Automobile AB (Saab Automobile) and two subsidiaries with the District Court in Vänersborg, Sweden.
Saab Automobile and its creditors have approximately five to six days to submit their view to the District Court before the Court takes a final decision about termination of the reorganization. The management of Saab Automobile will consider future steps and continues the current discussions with Youngman about the necessary funding to pay the wages and be able to continue the voluntary reorganization.
For those who are interested in the finer details……
You can download a copy of Swedish Automobile’s 3rd quarter report at Saab Media.
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The basics……
• Saab Automobile AB (Saab Automobile), Saab Automobile Powertrain AB and Saab Automobile Tools AB entered voluntary reorganization under Swedish law
• Continued discussions underway with key Saab Automobile stakeholders, Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman) and Pang Da Automobile Trade Company Ltd (Pang Da) about a transaction which will allow for the necessary investments and secure the longer term future and stability for Saab Automobile
• Conditional agreement reached on sale of Spyker Automotive business to North Street Capital, LP with net proceeds for Swan of EUR 32 million
• Filing for administration of Saab GB Ltd in November to give the company the necessary protection against creditors until it secured the necessary funding for the continuation of the company
• Continuing the voluntary reorganization process at Saab Automobile, continue the development of the revised business plan and restarting sustainable production top priorities for Saab Automobile management
• Depending on the outcome of the negotiations to sell Saab Automobile and Spyker Automotive, several possible scenarios for the future of Swan exist, including but not limited to a voluntary liquidation of Swan.
• Q3 2011 sales of € 75.8 million, Q3 EBIT of € -87.5 million
• Cash generated from operations in Q3 amounts to € -81,1 million
• Sales performance seriously affected by production stoppages and tight liquidity situation during third quarter
• Efficiency improvement initiative launched as part of voluntary reorganization process, in order to create more flexible and competitive cost structure within the Saab Automobile business
• 1,235 cars sold (wholesale) in Q3 2011, compared to 8,540 in Q3 2010, a decrease of 86%
• 2,775 cars sold (retail) in Q3 2011, down 63% compared to 7,430 in Q3 2010
• 130 cars produced in Q3 2011, compared to 9,777 in Q3 2010, a decrease of 99%
As the day in question is tomorrow and there are still a few headlines going around about this, I thought it wise to bring it back to the top of the page.
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Despite the sound of the headline, this is not a press release.
The purpose of this posting is two-fold: to talk of the delay in the submission to creditors that was planned for November 22, and to clarify what was going to happen on that date.
As has been mentioned in the media already, Saab/Swan and Guy Lofalk have taken a decision to delay submitting their composition proposal to creditors. According to the time plan mentioned at the Creditors Meeting on October 31, this proposal was due to be submitted on November 22. As with much of what’s happening as part of this process, however, that date on that October plan was a preliminary date, and subject to change depending on the prevailing circumstances.
Right now, the prevailing circumstances include ongoing negotiations with our partners and stakeholders. We submitted a purchase proposal to General Motors, which they rejected. We are now negotiating a proposal with a view to getting an outcome that will be acceptable to all parties and it was held that the November 22 submission should be delayed in order to facilitate those ongoing negotiations.
There’s been a fair bit of anxiety over the November 22 date and what it might entail for Saab. It has been described in some reports as another Creditors Meeting, which implies a decision point in the process. This is not actually the case.
What was actually due to happen was the submission of what is referred to as a composition proposal. This is a proposal sent to creditors by Saab for their consideration, one that specifies how Saab intends to pay back outstanding debts, as well as a proposal on future payment and delivery terms. Our creditors and suppliers have been notified about this delay by Saab’s purchasing department as part of our ongoing conversation with stakeholders.
There is no replacement date for November 22 at this stage, but obviously everyone concerned would like to get this process moving as soon as possible. We also have to get it right, however, and the first crucial step in getting it done right is to get a purchase proposal together that all parties can approve, which is what we’re working on right now.
TRADING UPDATE SWEDISH AUTOMOBILE N.V. (including SAAB AUTOMOBILE AB)
THIRD QUARTER 2011
Zeewolde, the Netherlands, 18 November 2011 – Swedish Automobile N.V. (Swan), a holding company that owns subsidiaries which produce and sell premium automobiles under the Saab and Spyker brands (together referred to as the “Group”), today issues a trading update for the third quarter of 2011 ended 30 September 2011. The Group is listed on NYSE Euronext Amsterdam (ticker symbol SWAN).
KEY DEVELOPMENTS
• Saab Automobile AB, Saab Automobile Powertrain AB and Saab Automobile Tools AB (together Saab Automobile) entered voluntary reorganization under Swedish law
• Longer term future and stability for Saab Automobile expected after signing of a memorandum of understanding with respect to a EUR 100 million conditional agreement on sale of all shares in Saab Automobile and Saab Great Britain Ltd. (Saab GB) to Pang Da Automobile Trade Company Ltd (Pang Da) and Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman)
• Conditional agreement reached on sale of Spyker Automotive business to North Street Capital, LP with net proceeds for Swan of EUR 32 million
• Efficiency improvement initiative launched as part of voluntary reorganization process, in order to create more flexible and competitive cost structure
• Finalizing voluntary reorganization process, implementing revised business plan and restarting sustainable production top priorities for Saab Automobile management
• Sales performance seriously affected by production stoppages and tight liquidity situation during third quarter
CORPORATE AND OPERATIONAL REVIEW
Voluntary reorganization under Swedish law
While work continued throughout the third quarter to secure short-term financing, Saab Automobile concluded in early September that, considering Saab Automobile’s limited financial resources and the time needed to secure the required approvals for the investments by Pang Da and Youngman, a voluntary reorganization would entail the best preconditions for using existing resources in the most efficient way. The purpose of the voluntary reorganization process was to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman.
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):
Not so much one about Saab, but I know we have a few SWAN shareholders who tune in here…..
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Zeewolde, The Netherlands, 1 November 2011 – Swedish Automobile N.V. (Swan) announces that the Extraordinary General Meeting of Shareholders (EGMS) will still be held on 11 November 2011. Further information on the sale of Saab will be provided at the EGMS.
The EGMS was convened after agreements were signed with Pang Da and Youngman, which related to an equity investment in Swan and the formation of manufacturing and distribution joint ventures with Saab Automobile AB (Saab Automobile) for Saab branded vehicles in China. The agenda for the EGMS on 11 November 2011 includes:
1. the amendment of the articles of association of Swan (introduction of a one tier board structure and increase of the authorized share capital);
2. composition of the board of Swan (including the appointment of new board members).
On 23 October 2011, Swan announced that the equity investment agreements with Pang Da and Youngman had been terminated, and on 28 October 2011 Swan announced that a new Memorandum of Understanding (MoU) had been entered into with Pang Da and Youngman. In terms of the MoU, Pang Da and Youngman will purchase all of Swan’s shares in Saab Automobile and Saab Great Britain Ltd. (Saab GB) for an amount of EUR 100 million. Amongst other things, this share sale is subject to approval by Swan’s shareholders.
As a consequence of the termination of the equity investment agreements with Pang Da and Youngman, at the EGMS Swan’s shareholders will not be asked to vote on amendment of Swan’s articles of association nor to appoint new board members.
However, the EGMS will still be held on 11 November. At the EGMS, Swan will give shareholders further information about the structure of the new transaction with Pang Da and Youngman, and will discuss that transaction with shareholders.
A further extraordinary general meeting of shareholders will be convened soon to ask the general meeting to approve the sale by Swan of its shares in Saab Automobile and Saab GB. The minimum convocation period is 42 days. Nevertheless, given the challenges faced by Saab Automobile and the nature of the new transaction with Pang Da and Youngman, Swan is of the view that it is important to discuss the new transaction with shareholders as soon as possible and urges all shareholders to attend the EGMS on 11 November 2011. Applications to attend can be made up to and including Friday 4 November 2011.
Trollhättan, Sweden: Today, Swedish Automobile N.V. (Swan) announced that it has given notice of termination with immediate effect of the Subscription Agreement of July, 2011 entered into by Swan, Pang Da and Youngman.
Swan took this step in view of the fact that Pang Da and Youngman failed to confirm their commitment to the Subscription Agreement and the transactions on the agreed terms contemplated thereby as well as to explicit and binding agreements made on October 13, 2011 related to providing bridge funding to Saab Automobile AB (Saab Automobile) while in reorganization under Swedish law.
Pang Da and Youngman have presented Swan on October 19 and 22 with certain conditional offers for an alternative transaction for the purchase of 100 percent of the shares in Saab Automobile which are unacceptable to Swan. However, discussions between the parties are ongoing.
In the past few days Saab Automobile AB’s CEO and Chairman Victor Muller has made statements that the company is in a position to make salary payments to its employees but would not be able to do so because of legal restrictions.
These statements have unfortunately led to the interpretation that the funds would be available within Saab Automobile AB. However, Victor Muller reiterates that the funds to which he referred to are not and have never been within Saab Automobile.
Victor Muller stresses the fact that Saab Automobile in every aspect is in full compliance with Swedish legislation as to the disclosure process in respect of the Swedish enforcement agency ‘Kronofogdemyndigheten’ and has been and will be totally transparent in this respect. Victor Muller regrets that his statements have been misinterpreted.
Trollhättan, Sweden: Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) aim to submit their appeal on the District Court’s decision to reject Saab Automobile’s proposal for voluntary reorganization on Monday September 12, 2011.
In yesterday’s decision, the District Court argued that the application of Saab Automobile lacks evidence that the purpose of a formal reorganization can be fulfilled. The Court is of the opinion that the first reorganization of Saab Automobile cannot be considered to be a successful one. It is further unclear to the Court whether – and if so when – the Chinese authorities will approve the EUR 245 million equity contribution of Pang Da and Youngman and whether the planned funding will be sufficient to structurally solve Saab Automobile’s financial problems. The Court finds that it is unclear how Saab Automobile will be able to end the liquidity crisis and continue its business. The current stops in production are likely to have resulted in considerable loss of the goodwill of the company and an impairment of the Saab trademark.
Saab Automobile disagrees with this interpretation of the voluntary reorganization proposal and aims to submit its appeal on Monday September 12, 2011. After the court has received the appeal it is expected that a decision on the appeal is taken soon after.
In the meantime, Swan and Saab Automobile continue discussions with several parties about obtaining additional funding for the short term.
Swan will update the market on further developments.
