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, October 20, 2011

North Street Capital commits on funding Saab

Saab has released a press release announcing that North Street Capital, LP has commited to fund the working capital of Saab Automobile, Swedish Automobile and Saab UK. This funding, consisting of $10 million in issue of new shares and $60 million in loan, has been secured due to doubts that the bridge funding from Chinese Youngman and Pang Da will be paid in full by October 22. Here's the press release:

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.

So what to think of this?

Well, my first thought is that if there are doubts that the bridge funding from Youngman and Pang Da will not be paid, then should we also be worried that the investment deals with the Chinese companies might not be followed through? I don't have the answer to that, but I do not take this news as a good sign...