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.

Tuesday, May 3, 2011

Saab soon to be one third Chinese and one third Russian owned?

Today Saab Automobile gave details on the announced partnership with Chinese Hawtai Motor. Here is my take on what this actually means in terms of ownership of Saab.

Subscription agreement with Hawtai
As far as I can read from Saab's press release about the agreement with Hawtai, they have reached a subscription agreement with the intensions to make Hawtai Motor a part owner of Saab. A subscription agreement is more or less a promise by the company (Spyker Cars) to sell a given number of shares to a particular investor (Hawtai Motor) at a certain price. Before Hawtai can be part owner of Saab, the company needs approval from the Swedish National Debt Office, Chinese governmental agencies and the European Investment Bank. And normally in a subscription agreement Spyker Cars can cancel the sale and refuse to issue the share certificates under certain conditions.

If the sale of Spyker Cars shares to Hawtai is completed, Hawtai Motor will own a maximum of 29.9 per cent of Saab Automobile. In return Hawtai will have to pay EUR 120 million and give Saab a convertible loan of EUR 30 million. The loan can be converted into shares.

Tenaci capital converts loan til shares
At the same time Tenaci Capital, owned by Victor Muller, will convert EUR 42 million of its current loan to Spyker Cars into share capital in Spyker Cars.

Saab can soon be one third Russian and one third Chinese owned
From earlier we know that also Russian banker Vladimir Antonov and his Convers Group is intended to become shareholder in Spyker Cars and thus part owner of Saab with a 29.9 per cent stake. In other words, these last events can lead to Saab Automobile soon being one third Russian, one third Chinese and one third European owned.

It is unknown if Vladimir Antonov's possible ownership will be completed by issuing new shares in Spyker Cars or by selling existing shares (for example from Tenaci Capital). But this deal with Hawtai (and possibly a later deal with Antonov) will most likely mean that the existing shares in Spyker Cars which are freely traded on the Amsterdam stock exchange will be watered down considerably. But I guess it's better that your shares get watered down than losing all value?

This ownership structure is okay with me. Back in February 2009 I called out for both Russian Rubles and Chinese Yuans to save Saab. Now it looks like I'll get my wish! But seriously, both Russia and China are two huge markets where Saab is more or less absent, and therefore financially strong owners from those countries can be a good thing for Saab.