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.

Monday, September 12, 2011

Saab signs EUR 70 million technology license agreement to secure bridge funding

Saab has just announced that the company has signed a EUR 70 million technology license agreement.

The technology license agreement is between Saab and a special purpose vehicle called Swedish Automobile coƶperatief U.A. (SPV). A special purpose vehicle is a legal entity created to fulfill specific objectives. In this case the objective is to secure Saab with bridge funding until the investment agreements with the Chinese companies Pang Da and Youngman is finalized.

In this agreement Saab gives the SPV non-exclusive rights in Saab's Phoenix architecture technology for a consideration of EUR 70 million. Chinese company Youngman signs an agreement with the SPV to purchase the license to the Phoenix architecture technology and providing a guarantee for its payment of the license.

This deal which will secure Saab EUR 70 million in bridge funding is still subject to finalization of definitive transaction documentation with the lender that will provide the bridge loan.

Dagens Industri reports that according to Saab, China's National Development and Reform Commission (NDRC) has approved this deal.

Even if the agreement is subject to finalization of definitive transaction documentation, I would say this is giant leap towards getting rid of the bankruptcy scare!!!