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.

Thursday, May 5, 2011

EIB ready to pave the way for funding solution for Saab

In a statement the European Investment Bank (EIB) says that it is ready to do its part to pave the way for a funding solution for Saab:
"The EIB is ready to do its part to facilitate a solution regarding the financing of Saab in line with its role as provider of financing of the R&D programme, while adhering to its established banking principles."
Earlier this week Saab secured short-term funding through a convertible 6 month loan from Gemini. And on Tuesday Saab announced a strategic partnership with Chinese Hawtai Motor where the Chinese company gets a ownership of up to 29.9 per cent of Saab in return for a EUR 120 million investment and a EUR 30 million convertible loan. Last week the Swedish National Debt Office approved Russian Vladimir Antonov as part owner of Saab. And even earlier Saab and Antonov's company Convers set up a deal where Antonov would buy Saab's properties and Saab would lease it back. All these arrengements, with exception of the loan from Gemini, must be approved by the EIB to be completed. The reason for this is Saab's EUR 400 million loan from the EIB.

The statement from EIB can therefore be interpreted that the EIB now will do their part to approve Hawtai Motor and/or Vladimir Antonov as owners and/or approve the property sale. The EIB continues the statement by saying the following:
"In the medium term, Saab may need a more flexible credit structure overall, as the company is undergoing major changes."
The EIB also writes the following:
"...when Saab presented its package of liquidity measures, in order to solve the liquidity squeeze due to low sales of cars, the EIB actively engaged with the other three parties involved (Saab, the Swedish National Debt Office (NDO) and General Motors) to try to resolve the situation."

One can hope that this statement means that the EIB has come to its senses and will let Saab take the necessary measures to secure funding of the business.

A side note: Did you ever wonder what Saab's EIB loan is about? Then you can check out a short project description here.