The Swedish government has approved Swedish Automobile's request to sell part of Saab's property unit to a consortium of Swedish real estate investors, prompting the announcement that Saab is targeting an Aug. 9, 2011 date for production at its Trollhaetten plant to resume.
Last Tuesday, the European Investment Bank gave its approval to the property deal that aims to ease the cash crunch that Saab is experiencing.
Last week, Swedish Automobile -- formerly known as Spyker Cars NV -- inked a EUR28 million (around $40 million) agreement to sell 50.1 percent of Saab's property unit, Saab Property AB, to a group of investors led by Hemfosa Fastigheter. With the closing of the deal, Saab will receive about EUR22.5 million.
Meanwhile, the remaining portion of the payment will be in the form of a bond. The Fastigheter consortium is permitted to increase its investment to EUR33 million within 30 days of the deal's closing. In the last few weeks, Saab and Swedish Automobile were able to raise about EUR61 million in "additional funding commitments."
Saab continues to be in talks with suppliers so that they could restart deliveries. Saab explained that Aug. 9, 2011 is the target date since its suppliers need a longer lead time to resume sufficient supplies and in consideration of the summer shutdowns at several component makers.
In January 26, 2010, General Motors agreed to sell Saab to Spyker, as subject to regulatory and government approval. The sale was finalized on February 23, 2010, with the agreement including a loan from the European Investment Bank. Following a brief two-month break, Saab resumed production in March and is now preparing to roll out the new 9-5 sedan. GM continued to be the preferential shareholder at Saab.
Founded by Victor Muller and Maarten de Bruijn in 1999, Spyker Cars It posted negative earnings before interest tax (EBIT), putting it operating loss at EUR140 million. Spyker also posted EUR60 million in losses from discontinued operations, which includes the losses of Spyker Automotive business. Spyker’s net loss in 2010 was pegged at EUR218 million.
It didn’t take long before Saab ran out of money, and Spyker Cars failed to plug the bleeding. Having lost the ability to pay its suppliers and its employees, Saab halted vehicle production in May 2011 and Muller began looking for funding. Swedish Automobile was then formed as the new parent of Spyker Cars and Saab.
For several months, Victor Muller, Spyker and former Saab chief executive, had attempted to implement a rescue agreement with different investors from Russia, Middle East and China, which include Youngman and Pang Da Automobile Trade Co Ltd.
The rescue agreement with Youngman and partners, however, failed to materialize through after General Motors, Saab’s former owner, refused to approve the sale.