IMPORTANT NEWS: National Electric Vehicle Sweden has agreed to buy the assets of Saab Automobile and the sale is expected to be finalized during the summer.

Sunday, April 24, 2011

EIB's conditions make property sale transaction impossible

Yesterday we got the disturbing news that the European Investment Bank has set unreasonable conditions for the sale of Saab's property to Vladimir Antonov's Convers Bank, and thus did its best to thwart Saab's plans. The EIB's behavior is baffling. The sale deal would mean that properties valued to SEK 1 billion in collateral was freed up for sale and at the same time the EIB loan would be reduced with EUR 120 million which equals SEK 1.1 billion. In other words, the remainder of the loan would be better secured than before. But the EIB says that if the properties are to be sold, the loan must be paid back within 90 days. An absurd requirement.

Today Lars Carlström, the spokesman of Vladimir Antonov in Sweden, says that the conditions set by the EIB makes the transaction impossible. Here's a translation of the news piece from Swedish Radio from earlier today:

The EIB requires shorter repayment schedule
The Russian financier Vladimir Antonov has offered to buy Saab's real estate and thus free up money for Saab. But the European Investment Bank (EIB) requires that the remaining loan with the EIB after a property sale, must be repaid at an impossible pace, says Antonov Swedish spokesman.
According to Antonov Swedish spokesperson Lars Carlström, the demands the EIB set before the transaction can be carried through, are unreasonable - the EIB requires that the loan that remains with the EIB is to be repaid over a shorter period of time than the old larger loan.
- The conditions which are set by the EIB is totally unreasonable for Saab to live up to. It would mean that Saab can not continue to have a loan from EIB with the premises which are stipulated in this proposal from the EIB, says Lars Carlström, who is a spokesperson in Sweden for Vladimir Antonov.
What are the conditions?
- The problem with the conditions are that if you carry out this transaction, it also means that the loan must be repaid over a short period of time than is possible.
You talk about that part of the loan that will remain with the EIB for the future?
- Yes, that's right.
So the repayment schedule is different from the original repayment schedule?
- That's one way to express it, in this situation we therefore run into problems when we want to borrow less money from the EIB.

According to Dagens Industri, there is still some hope:
According to Lars Carlström, representatives of Antonov have tried to get in touch with the EIB to discuss the conditions but have been told that it is not possible until after the Easter weekend.
If the transaction can not be carried through, Carlström says that Saab will end up in a difficult position. But he also says that they are exploring other alternative ways to raise money for Saab.