The latest deal to save Saab

Swedish newspaper Dagens Industri today writes about the latest deal to save Saab. Accoring to DI, the first part of the deal is to secure EUR 30 - 40 million through payments from Youngman. This money is supposed to be used to pay salaries to the Saab employees and ensure a continued reconstruction.

The next step is for an undisclosed Chinese bank to loan SEK 2 - 3 billion (EUR 230 - 340 million) to Saab. Money probably intended to be used to redeem the loan in the European Investment Bank and pay suppliers so that production of Saab cars in Trollhättan can be restarted.

Chinese Youngman will guarantee the loan in the Chinese bank and will in return get convertible preferred shares in Saab. These are shares that do not give the holder any influence on the company, but which after a predetermined time can be turned into ordinary shares in the common stock. One can imagine that the redemption date can be around 5 years from now, when Saab no longer will depend on General Motors (GM) unique technology.

By giving Youngman only preferred shares without any influence over Saab, the hope is that GM will accept the deal and still supply Saab with technology.

Rachel Pang, CEO of Youngman Automotive and Saab's biggest fan in China?

Youngman will also agree to invest SEK 10 billions the next five years. This investment will be in a joint-venture company and not directly into Saab.

According to TTELA, the plan is to establish a joint-venture company which holds the rights to Saab developed technology and which is responsible for technology development at Saab. This company will be part owned by Youngman and part owned by Saab's parent company Swedish Automobile. Should Saab go bust, this will secure Youngman some value for money invested and the loan it is to guarantee.

The establishment of a joint-venture company will not require any changes in the ownership structure of Saab Automobile and this part of the deal will therefore not need the blessing of GM or the European Investment Bank. The Swedish National Debt Office (NDO) will however need to approve such a deal since the NDO has plegdes in much of Saab's assets. It has been reported that Victor Muller did meet the NDO on Monday, and it is probable that the meeting was in regard to such a deal. The NDO has said that their collateral in Saab's tools and parts companies should be enough to cover the loan in the EIB which the Swedish Government has guaranteed for Saab. And the NDO should therefore be open to allowing a joint-vernture company that holds Saab's development and technology.

In this deal China's National Development and Reform Commission (NDRC) will have to approve the Chinese investments/loans. From earlier we know that two local branches of the Development and Reform Commission approved the intital plan where Youngman and Pang Da would become part owners of Saab. It is uncertain whether the NDRC will approve the deal outlined here or not. But Youngman transferring EUR 3.4 million yesterday is a good sign. And if the promised EUR 30 - 40 million is also transferred quickly (which is a big sum that probably needs clearance by high level Chinese authorities), then we can consider it a very good sign.

So that is the deal according to Swedish news media. We will have to wait and see if this is the final deal that saves Saab.

Saab reconstruction hearing to be held Monday

TTELA reports that Saab has requested a oral hearing with Vänersborg District Court concerning the reconstruction process. The district court has allowed Saab to present its response to the administrators request that the reconstruction should be ended. The proceedings will be held on Monday at 13:00 CET.

This means that Saab has gotten four more days to prepare its presentation to the court. And also four more days to secure funding that will allow the company to continue the reconstruction.

Earlier today we got the news that Saab had gotten EUR 3.4 million from Chinese Youngman. Enough to cover incurred taxes. But still several millions are needed to pay salaries for November and December and to secure a continued reconstruction. The coming days will see if Saab and its parent company Swedish Automobile will be able to secure the needed funding.

Saab confirms reception of first money installment from Youngman

Saab has just confirmed that the first money installment from Youngman has been received. Here's the statement:

"Saab confirms that the first payment in the funding promised by Youngman has now been transferred to the company's account. Efforts to secure the rest of the funding required to pay salaries and continue the reconstruction is moving step by step forward."

This transfer is the first EUR 3.4 million of a short-term funding that is expected to be around EUR 30 million and be enough to cover incurred taxes and unpaid salaries for November and the coming salaries for December.

Saab's CEO and Chairman Victor Muller said to TTELA that this is a good sign:

"Yes, this is a goood sign. Youngman has transferred EUR 3.4 million to us."

Now the attention is on securing the remaining of the short-term funding promised by Youngman.

"Now, we are trying to work hard to pay salaries and to secure funding for salaries and keep the company in reorganisation," Eric Geers, spokesman of Saab, said.

Another piece of good news is that the Swedish Tax Authorities confirms that Saab has paid incurred taxes.

"They have paid their VAT now," said Margareta Åhrberg, duty officer at the Swedish Tax Authorities to TT.

Fresh money can be on the way to Saab

Updated with info from Eric Geers at Saab that so far no money has arrived

Local Trollhättan newspaper TTELA reports that one of their sources say that late last night SEK 34 million to pay governmental taxes and fees arrived at Saab. This amount was paid by Youngman on Friday. Another SEK 180 million is also expected shortly as TTELA's source say that Youngman will pay that ammount on Wednesday. This money should be enough to cover salaries and some more. And it doesn't stop there. Another SEK 90 million is expected within December.

But don't start cheering just yet. Another source of TTELA says that the money has not arrived at Saab yet.

Now, Tuesday morning, Eric Geers of Saab tells TTELA that no money has been received so far.

Today Tuesday TTELA reports that in the latest deal that has been discussed, the Saab technology and development are to be owned by a new company, half owned by Saab and half owned by Youngman. A solution that would give Youngman access and right to Saab technology, but not to the current technology or the Saab brand. A solution that the different stakeholders like General Motors hopefully can accept.

What all this tells me is that there is still hope. There is a reason why no bankruptcy filing was handed in to the court yesterday.

No Saab bankruptcy today

Earlier today it was reported that Saab's owner Swedish Automobile was preparing to file for bankruptcy in its Saab subsidiaries. But so far no bankruptcy filings have been handed in to Vänersborg District Court.

"A bankruptcy filing has not been submitted, that much I can say. But it is clear that it is a possibility if we do not come to a solution. Each day that passes is a day too much, especially without salaries paid. But Youngman is not out of the picture," Eric Geers, Executive Director Communications, said to TTELA.

According to different Swedish news providers, there is supposedly a disagreement in the Swedish Automobile board on how to proceed. Victor Muller is reported to have arrived in Stockholm this afternoon and ready to continue the work to save Saab. At the same time news reports say that if Saab has not paid incurred taxes by the deadline this evening or Saab does not file for bankruptcy today, Victor Muller can be held accountable for unpaid taxes. This could also be a reason why Martin Larsson,  Executive Director New Business Development at Saab, today in an email to the company register office declared that he has left the board of Saab.

That would make Victor Muller the only member left in the Saab board. Presently (Monday evening) Victor Muller is reported to be in a meeting at the Swedish National Debt Office. It is unclear what the purpose of this meeting is.

There has been speculations that Youngman has paid the November salaries, but Saab says no money has so far been received by the company, but the salaries are a top priority.

"At this point, it is getting finance in order to first of all pay salaries and get going, but these salaries have not arrived. At this point nothing has arrived," a Saab spokesperson told just-auto.

But the spokesperson could confirm that there are still discussions with Youngman ongoing.

"There are discussions ongoing with Youngman and obviously it is taking far too much time, we know that. It is tough, it is very tough."

Since no bankruptcy filing has been handed in to the Vänersborg District Court today, one can assume that Victor Muller still believes that Saab can be saved, or at the very least that money to pay taxes and salaries will be raised in time.

According the Netherlands Authority For the Financial Markets, AFM, a press release from Swedish Automobile is expected shortly and therefore the trade in the SWAN stock has been suspended until further notice.

Youngman: "Deal close"

Earlier today it was reported that Swedish Automobile is preparing a bankruptcy application for Saab. It is unclear if the application will be handed in today or if it is only as a preaution should the negotations with Youngman not bear fruit. But it seems that Youngman still believes in a deal.

Rachel Pang, CEO of Chinese Youngman Automotives, has now according to Swedish news agency TT (as reported in TTELA) left Stockholm after intensive negotiations with Victor Muller. And to TT she says that the parties are close to an agreement and that money will be transferred to Saab.

"We will soon finalize our agreement," she said in a telephone interview with TT, but would not go into the details.

When asked by TT why the negotiations haven taken so long and when a deal will be finalized, she answered the following:

"It is a comprehensive agreement. We're working on finalizing it. It will be done."

"Money will be transferred to Saab," said Rachel Pang before hanging up.

Swedish DI claims: "Saab to declare bankruptcy today"

Swedish Dagens Industri claims that Victor Muller and Saab will go to the Vänersborg District Court this afternoon to request that the court declare the company bankrupt. DI reports that this has been confirmed by several independent sources.

Swedish Radio P4 Göteborg's source say that Swedish Automobile is preparing a bankruptcy application, but it is uncertain when and if it will be sent to the court.

Swedish news agency TT does however report that their sources say that no decision concerning bankruptcy has been taken.

Martin Larsson, Executive Director New Business Development, would neither confirm nor deny the information.

"I have no comments," was his only answer when Dagens Industri talked to him.

Local Trollhättan newspaper TTELA has also been in touch with its sources who say that the negotations with Youngman is still ongoing and that there are no plans to apply for bankruptcy yet.

Head of the labour union Ledarna at Saab, Thomas Haglund, calls the latest news rumors.

"It is only rumors. I know that they were in Stockholm negotiating during the weekend. We will have to wait and see if there will be any news during the day. The result can just as well be the opposite," Thomas Haglund said according to Svenska Dagbladet.

My assessment is that they probably are preparing a bankruptcy application just in case. If the negotiations do not bear fruit, then they need to be prepared for the next and final step.