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.

Wednesday, December 7, 2011

They burn the midnight oil to save Saab

This night Victor Muller and Youngman have worked hard to come up with a new solution to save Saab. It is now or never. According to Dagens Industri, in the latest plan the Chinese will inject billions of Swedish kronor into Saab. Dagens Industri thinks it could be as much as SEK 5 billion. Money to be used to repay the European Investment Bank loan, pay outstanding debt with the suppliers and restart production. And all this without getting any influence on Saab.

This could be solved by giving Youngman convertible preferred shares in Saab. This means that Youngman would get shares that would not give them any influence on the company, but which after a predetermined time can be turned into ordinary shares in Saab's common stock and then Youngman becomes an ordiniary shareholder. One could imagine that the redemption date could be around 5 years from now, when Saab no longer will depend on GM unique technology.

The convertible preferred shares could also have a fixed-income component which ensures Youngman a yield on the investment should Saab make money during these five years.

The big question is if the Chinese authorties with the National Development and Reform Commission (NDRC) in the forefront would accepts such an arrangement. From earlier we have gotten (unconfirmed) reports that the NDRC wanted Saab to be fully Chinese owned.

At the moment the only conclusion I can draw is that both Swedish Automobile with Victor Muller and Youngman with Rachel Pang are working very hard to find a solution and save Saab!