Tag: Youngman

Coverage from the last 24 hours of Saab news

A few pieces from the web that I think people should check out as they try to digest the news from today……..

Firstly, there’s an interview with Saab CEO Victor Muller on Radio P4 West, from Sweden. It’s in English.

Lyssna: Saabs vd, Victor Muller, om företagets situation

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From the observer/enthusiast point of view, Life with Saab has summarised the day’s events quite well. It’s a piece of reasoned and measured analysis that I personally think sums up the situation nicely.

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If I can provide a rather basic summary of what’s transpired:

  • Saab had agreements in place with Youngman and Pang Da for the distribution of vehicles in China and the formation of a manufacturing joint venture. Some of these agreements were binding and some still in development. These involved Youngman and PangDa taking an ownership stake in Saab totalling just over 50%. The agreements were subject to approval to the NDRC and this process was progressing well, having passed provincial and local approval with national approval very close to being decided.
  • Mr Lofalk is reported in newspapers as having investigated a 100% takeover of Saab by Youngman and PangDa. This is in spite of the aforementioned agreements, and regardless of the fact that Saab’s reorganisation submission was based on the above agreements, and also without Saab’s knowledge.
  • Saab had a bridge financing agreement in place with Youngman for an amount of 70mil Euros, however there seem to have been complications with this agreement, to the point where Saab could not count on the full amount of the agreement being received in a timely manner. An instalment has been paid.
  • Saab sought and found alternative bridge financing arrangements in the United States, announced yesterday.
  • Despite this deal, Guy Lofalk has indicated that funding is not sufficient to continue reorganisation and has submitted an application for the reorganisation to be stopped. Saab will seek to appeal this and have Guy Lofalk replaced as administrator.

That’s not comprehensive by any means, and does not include all the side shows such as Geely, etc, but I think you should get the picture.

Some further resources:

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Press Release: Swedish Automobile Received Commitment From North Street Capital On Funding

Trollhättan, Sweden: Swedish Automobile N.V. (Swan) announces it has received a commitment from North Street Capital, LP (North Street) on the funding of Swan and Saab Automobile AB (Saab Automobile).

The offer consists of the following transactions:

  • Subscription to 2,386,635 ordinary shares in the capital of Swan at a price of USD 4.19 per share for the purpose of funding the working capital of Swan, Saab Automobile and Saab Great Britain Ltd. The shares to be issued will be paid in full by Friday October 21, 2011.
  • Procurement of a loan to Saab Automobile in the amount of USD 60 million to be collateralized by a first lien on certain assets of Saab Automobile as well as a second lien on the collateral as pledged to NDO. This loan is subject to further documentation. The object of the parties is to finalize documentation no later than Monday October 24, 2011 with subsequent funding within two days thereof.

Swan intends to accept this offer because it has doubts that the bridge funding of Youngman and Pang Da, of which a partial payment has been received, shall be paid in full on 22 October 2011. Immediate availability of funding is necessary to continue the reorganization process of Saab Automobile.

No NDRC decision today

Some internal news from Saab:

Many have highlighted October 14 as a possible date when the NDRC would take its decision regarding Saab’s planned business agreements with Pang Da and Youngman. For third parties it is not possible to know exactly when authorities like the NDRC will take their decisions.

The reason for October 14 spreading the way it has, is an early assumption made by Saab in court documents, based on general process information that Pang Da and Youngman received from the NDRC. The fact that we didn’t receive any decision from the NDRC today has no bearing on the decision process in its entirety and is not something from which we should draw any conclusions.

Pang Da and Youngman are very committed to making our partnership a success as proven by yesterday’s announcement regarding the first payments under our bridge financing agreement with Youngman.

In other words, Keep Calm and Carry On. We can’t control the timing of the NDRC process, we can only make best estimates of when their decision will come, which is what we did in our court documents.

Saab Automobile Update

Trollhättan, Sweden: Management of Swedish Automobile N.V. (Swan) and Saab Automobile AB (Saab Automobile) confirm that the reorganization is progressing and that a first payment by Youngman under the bridge loan funding commitment as announced on September 12 was received by Saab Automobile.

Further payments under the amended and final bridge loan agreements signed between Youngman and Saab Automobile are expected to be made during this week and by October 22 of this year. It is the intention to repay the bridge loan with the proceeds of the EUR 245 million equity investments by Youngman and Pang Da, which are still subject to approval by relevant authorities and parties which Swan expects to receive during the next weeks.

Press Release: Saab Automobile AB Files For Voluntary Reorganization

The following is a release from Swedish Automobile:

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7 September 2011

Saab Automobile AB Files For Voluntary Reorganization, Saab Automobile Parts AB And Overseas Subsidiaries Excluded

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) will file for voluntary reorganization today at 09:00 CET with the District Court in Vänersborg, Sweden. Swan and Saab Automobile are of the opinion that, considering Saab Automobile’s current limited financial resources, a voluntary reorganization will entail the best preconditions for using existing resources in the most efficient way. The eventual purpose of the proposed voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman.

The proposed voluntary reorganization will be a self-managed, legal process under Swedish law headed by an independent administrator appointed by the court who will work closely with the Saab Automobile management team. As part of the process, Saab Automobile has formulated a reorganization plan, which includes a number of aspects aimed at lowering its cost-base and creating a viable, competitive and independent organization. This reorganization plan will be presented to creditors in more detail within three weeks of the filing, although this period could be extended by the court.

Following court approval, the voluntary reorganization will be executed over an initial period of three months. If required, the reorganization period can be extended by another three months, up to a maximum of twelve months. Swan and Saab Automobile are confident that they will secure additional short-term funding for the reorganization period and are currently in negotiations with several parties about obtaining such funding. Funding for Saab Automobile to exit reorganization has been secured through binding agreements with Pang Da and Youngman as announced on July 4, which agreements are, however, subject to obtaining certain approvals.

As part of the reorganization filing, the court-appointed administrator will apply for the Swedish state’s wage guarantee scheme to allow wage payments to all Saab Automobile employees to be made. August salaries are expected to be paid within a short time frame following the court approval. With regards to outstanding debts to creditors, Saab Automobile will seek the support of its creditors for the reorganization process and is confident it will obtain this support, particularly because Saab Automobile aims at full redemption of outstanding debts.

Saab Automobile has proposed that the District Court appoints Swedish lawyer Guy Lofalk as administrator, who also was the administrator in the successful 2009 Saab Automobile reorganization. Victor Muller, CEO of Swan and CEO and Chairman of Saab Automobile, and the Saab Automobile management team will cooperate closely with the administrator to execute the reorganization plan. The voluntary reorganization process will cover Saab Automobile AB, Saab Automobile Powertrain AB and Saab Tools AB. All other entities, including Saab Parts AB and all overseas entities such as Saab Great Britain and Saab Cars North America, are excluded from the reorganization.

The reorganization plan contains a blueprint of how Saab Automobile’s Management expects to improve Saab Automobile’s business model with an emphasis on an independent, lean and competitive organization. Many key elements of Saab Automobile’s original business plan remain, as Management believes the objectives of the overall strategy remain intact. Through the roll-out of a fully rejuvenated product portfolio, partnerships with Chinese firms Pang Da and Youngman that will ensure access to the world’s largest and fastest growing market, and a strong and global brand, Saab Automobile is well-positioned to realize its objective of becoming a viable independent premium car manufacturer.

Victor Muller, CEO of Swan and CEO and Chairman of Saab Automobile, said: “Since securing the long-term funding through conditional agreements with Pang Da and Youngman, who both support this voluntary reorganization, we have focused on securing funding to bridge the period until we receive their funds. We have concluded that a voluntary reorganization process will provide us with the necessary time, protection and stabilization of the business, allowing salary payments to be made, short-term funding to be obtained and an orderly restart of production to be prepared.”

“While the voluntary reorganization process will no doubt present us with a number of tough issues and decisions, I believe that Saab Automobile will emerge stronger from this process. The potential for Saab Automobile as a viable, independent premium car manufacturer is there, as shown by the rejuvenation of our product portfolio, approximately 11,000 orders and the conditional long-term funding already in place through the binding agreements with Pang Da and Youngman that will give us access to the Chinese market.”

“I would also like to express my deep gratitude to our employees, dealers, suppliers and all other stakeholders who have been so patient and understanding in the past trying months. I realize that we have severely tested their patience, but it has been heartening to see that in general, our employees, dealers, suppliers and other stakeholders have stood by us through this tough period. I look forward to continuing these relationships and collectively start building a brighter future for Saab Automobile.”

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.

An update on Saab’s situation from the inside

I’ve had a few people in comments ask about the current situation at Saab Automobile. I’ve also read a bunch of reports that continue to cover our apparent demise in the finest detail. From a personal point of view, I store those away and look forward to the best revenge – seeing Saab live well.

It’s difficult to provide constant updates, but the company is doing the best it can to keep the general public informed as to what’s going on. We know that we have a lot of interested stakeholders who are hungry for information and we try to get them the information they need, but the situation is quite fluid and daily updates are not appropriate at this point in time because, as we’ve mentioned in previous releases, the situation changes from day to day, and sometimes from hour to hour within the day.

Nevertheless, here’s an attempt to bring you up to speed with some of what’s going on.

Our medium-long term outlook has recently been enhanced with the deal announced last week for a joint-venture between Saab, Youngman and PangDa for future manufacturing and distribution in China. We see huge potential in the Chinese market. In the short term, we see great interest already in our newest releases, the Saab 9-5 and Saab 9-4x and we have an excellent sales partner in PangDa to enable us to grow our presence in the Chinese market. In the long term, we see great possibilities in terms of wider distribution and new JV manufacturing possibilities to add to our existing manufacturing in Trollhattan, Sweden.

The proposed joint venture manufacturing deal would see Saab-branded and child-branded vehicles being built and sold locally in the Chinese market. Whilst we value all of our markets, the Chinese market is the obvious growth corridor for Saab into the future and this deal is key to that future growth. Whilst we leave no stone unturned in making sure we’re prepared for the approval process, we have every confidence that the deal will get through regulatory approval both in Sweden and in China. Youngman, despite it’s name, is a well established company with a near 60-year history in transportation and automotive manufacturing. Whilst they may not be the biggest vehicle producer in China, they’re very well connected and respected in the industry, which is why we had been speaking with them for a significant period of time prior to this deal.

Our achilles heel at the moment is not the long-term outlook, though we do not take that for granted. Our immediate challenge is cashflow; securing sufficient funds to get suppliers on board and the factory up and running again on a consistent basis.

These are all points mentioned previously in various statements from Saab, but they’re worth repeating again.

  • Saab has a significant order bank in place. Those orders represent a big boost to Saab’s inward cash flows, however we can’t invoice and receive payment for those cars until they’re built. We can’t invoice a 98% complete vehicle. You can call it a Saabish chicken-and-egg puzzle if you like – we have plenty of orders to complete (meaning inwards cashflow) if we can get parts, but parts have been difficult to get because of restricted cashflow. We are working hard with suppliers to resolve this.
  • Some people have mentioned that the PangDa funds should have been sufficient to get things running again on a stable footing. The PangDa purchase was indeed a significant one, however we still have to build and supply those vehicles to PangDa, which is what they paid their money for.
  • We hope to receive another instalment of EIB funding soon, however as many of you know, this is not a short term liquidity solution. EIB funding is for longer term investment in efficient technology. Whilst Saab are fortunate to do a lot of work in this area, we understand that the EIB take a longer term outlook, which is what we’re looking to put in place with deals such as the Youngman and PangDa deals.
  • Work continues to secure the PropCo sale and lease-back of Saab’s real estate, which would provide a significant boost to liquidity.

Saab has a brilliant product plan for the coming years, as well as great offerings for sale in the current range.

  • The Saab 9-4x is completely allocated for the 2011 model year and interest in the 2012 model year is already very strong.
  • We have the all new Saab 9-5 sedan in place and established in the market.
  • The Saab 9-3 Griffin sees a significant technology boost to the 9-3 range and is the best Saab 9-3 we’ve ever built.
  • The 9-3 TTiD range offers the most powerful and flexible sub-120g emissions package in the market. This is a key to sales in many European markets and interest has been very strong for this model.
  • The Saab 9-5 SportCombi, a key for the 9-5’s success in Europe, is about to come into production.

It’s the biggest and best model range that Saab has had in its 64-year automotive history. For those of you who are frustrated that you can’t take delivery of your car just yet, let me assure you that we’re just as frustrated that we haven’t been able to get it to you.

We’d like nothing more.

We will keep you updated as best we can, but no specific date can be promised at this stage for the continuation of production. The conditions that will enable that are still being negotiated with key suppliers around the world.

Press Release: Saab Automobile, Spyker, Pang Da And Youngman Enter Into MOU On Distribution/Manufacturing Partnership For China And Equity Participation

Trollhättan, Sweden: Spyker Cars N.V. (Spyker) announces today that Spyker, Saab Automobile AB (Saab Automobile), Pang Da Automobile Trade Co., Ltd (Pang Da) and Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman) signed a non-binding memorandum of understanding (MOU). The MOU includes an equity participation in the total aggregate amount of about EUR 245 million as well as a strategic alliance consisting of a three partite distribution joint venture and a tripartite manufacturing joint venture for Saab-branded and child brand vehicles in China.

On 16 May 2011 Spyker and Saab Automobile signed a memorandum of understanding (the 16 May MOU) with Pang Da, China’s largest publicly traded automobile distributor with over 1,100 dealerships nationwide. That 16 May MOU included a strategic alliance consisting of a 50/50 distribution joint venture (DJV) and a manufacturing joint venture (MJV) for Saab branded vehicles as well as for an MJV owned brand (the so-called ‘child brand’) in China. It was agreed that Saab Automobile would have up to 50 percent in the MJV, with Pang Da and a to-be-selected manufacturing partner owning the remaining shares. Pang Da and Saab Automobile have now agreed with Youngman to become the manufacturing partner in the MJV (in which Youngman will take 45% of the shares, Saab 45% and Pang Da 10%) and the DJV in which Youngman will take 33% of the shares, Pang Da 34% and Saab Automobile 33%.

Under the May 16 MOU, Pang Da would take an equity stake in Spyker for a total amount of EUR 65 million, representing 24 percent of Spyker on a fully diluted basis. With Youngman entering as a new shareholder in Spyker, the equity stake of Pang Da in Spyker will remain at 24 % raising its investment to EUR 109 million. The share price remains at EUR 4.19 per share and Pang Da will have the right to nominate up to two members of the Supervisory Board of Spyker.

Youngman will take a 29.9 % interest in Spyker on a fully diluted basis investing EUR 136 million at EUR 4.19 per share. Youngman will have the right to nominate up to two members of the Supervisory Board of Spyker.

Spyker, Saab Automobile, Pang Da and Youngman will set up joint ventures with respect to the manufacturing of Saab branded and child branded vehicles and the distribution of Saab branded and child branded vehicles for the China market. Saab Automobile and Youngman will each have a 45% interest in the manufacturing JV and Pang Da will hold the remaining 10%. Saab Automobile and Youngman will each have a 33% interest in the distribution JV and Pang Da will hold 34%.

The MOU is non-binding and the transactions following the MOU are subject to agreement on definitive transaction documents and certain conditions, which include consents from certain governmental agencies and third parties.

Victor Muller, CEO of Spyker and Saab Automobile said: “Having entered the MOU on May 16 with Pang Da, we collectively immediately set out to identify the most suitable (manufacturing) partner to join Saab and our joint ventures. We are convinced that Youngman represents all the qualities required to make Saab and the joint ventures a success. This MOU not only shows the belief of Pang Da and Youngman in our products for the Chinese market, it also is a step that significantly strengthens Saab’s financial position and would secure the mid and long term financing of Saab Automobile. Both Pang Da and Youngman have demonstrated a similar entrepreneurial mindset as we have which we feel will be instrumental to establish Saab’s presence in China. I am very confident that based on their experience, proven skills, their ability to move quickly and their financial strength, we found the partners that are best suited to fully explore Saab’s potential in China.”

Mr. PANG Qinghua, CEO of Pang Da, said: “Since our visit to Saab Automobile in Sweden we are even more convinced of the potential of Saab in the global market and the Chinese market, the number one market in the world, in particular and we intend to fully explore it. Not only are we impressed with the current and future product line up that is very well suited to the needs of the Chinese market but we are particularly impressed by their design, engineering and manufacturing skills.”

Mr PANG Qingnian, CEO of Youngman said: “We have been in contact with Saab Automobile for quite some time and we are very pleased to have reached an agreement with both Pang Da and Saab. We feel that Saab as a premium European brand appeals strongly to the taste and preferences of the Chinese customer who is looking for top quality vehicles with the highest levels of safety, driving pleasure and comfort and an unmistakable design language. Youngman is an automobile industrial group that produces and sells Youngman branded motor cars, MAN brand heavy type trucks and automobile spare parts. Our Manufacturing facilities are state of the art and are exactly tailored to build Saab vehicles at the highest quality standards. We look forward to a long lasting and successful relationship with Saab Automobile and Pang Da both in China as well globally through our investment in Saab.”

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