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.

Friday, October 7, 2011

Swedish government finally stepping up as Geely wants Saab?

Today Swedish news paper Dagens Industri reports that the reason Saab has yet to receive the EUR 70 million loan from Youngman is that Saab has yet to fulfill all conditions for the loan.

"If the conditions aren't fulfilled, we can't pay," Rachel Pang, CEO of Youngman Automobile says to DI in an email.

Pang also dismissed the reports that Youngman is withdrawing from the deal with Saab. According to Pang, Youngman and Pang Da had a meeting with China's National Development and Reform Commission (NDRC) last weekend.

"We had a very good meeting. Just the fact that they visited us during the Chinese national holiday weekend shows that they are serious and want to finish this approval process quickly," Rachel Pang told Sydsvenskan.

At the same time the Swedish Government is according to Dagens Industri preparing to help Saab in the current situation. The Swedish Prime Minister's former State Secretary, Ulrika Schenström, is now working closely with the court-appointed reconstruction administrator Guy Lofalk. According to Dagens Industri's information, the Government wants to pay back Saab's loan to the European Investment Bank and convert the collateral the Swedish National Debt Office has in Saab's assets into shares. Shares which then quickly shall be sold to a Chinese buyer.

Saab's reconstruction administrator, Guy Lofalk, has recently been to China to meet Youngman. But according to DI, there he also met with Geely, the owner of Volvo.

And Geely is probably the reason the Government now is ready to act. Trollhättan newspaper TTELA today confirms from its sources that Geely is in fact interested in buying Saab. And they want the whole company, which would mean that the brand Saab would live on. Volvo is in need of more engineers and the Swedish automotive supplier industry is in need of both Saab and Volvo. In addition, Saab has top competence in several areas, and Geely believes that the collected competence will strengthen both companies. The Swedish Government knows Geely and has seen that with the support from Geely, Volvo has flourished. And should thus be positive.

As always, these news should be taken with a pinch of salt. But when TTELA writes something, it is usually the truth. So now we can more or less assume that Geely wants Saab. But that doesn't mean that Geely will get Saab. Saab still has binding agreements with both Youngman and Pang Da. And at present Youngman is the only company which are allowed to seek the approval from Chinese authorities to buy Saab.

"There are a number of interested parties. We have a binding agreement with Youngman and Pang Da. We must get the decision from the NDRC before we can start to negotiate with a new party," Executive Director Communications at Saab Eric Geers said.

The news about the Government stepping up is still not confirmed by other sources, but it is nonetheless positive news. And if finally the Swedish Government steps up, then it will regain my respect.

If in the end Saab and Volvo would become subsidiaries of the same parent, then maybe that's not so bad. It does seem to work for Peugeot/Citroen, VW/Audi, Fiat/Alfa etc.