First, Saab has confirmed that Swedish unions Unionen and Ledarna have officially filed for bankruptcy of Saab Automobile. That's par for the course and anything but a surprise, as it seems the automaker owes just about everyone some money. These unions represent white-collar workers who have not been paid by Saab for the month of August.
Second, the automaker has, as had been planned, "lodged their appeal against the District Court's decision last week to reject Saab Automobile's proposal for voluntary reorganization." Basically, Saab's creditors are suing the company for various amounts owed, and these sums would be sufficient to bankrupt and close down the automaker. Saab asked for government protection from these creditors, which was subsequently denied. The automaker is appealing that decision.
Finally, Saab says it has secured a bridge loan worth $96 million from a heretofore unknown legal entity known as Specialty Purpose Vehicle. Zhejiang Youngman Lotus Automobile (which we'll mention again in the next paragraph) has signed an agreement with the aforementioned SPV to license certain technologies from the legal entity.
This $96 million bridge loan would supposedly be paid back by the $352 million deal that Saab had previously signed with Chinese partners Pang Da and Youngman – and yes, that's the same company that is apparently licensing technology from SPV under this latest agreement.
Is your head spinning yet? We don't blame you... and all of these deals are still awaiting approval from Chinese authorities, which is anything but guaranteed. Feel free to peruse the trio of press releases after the break for all the official details from Saab.
Zeewolde, The Netherlands, 12 September 2011 - Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile) signed a technology license agreement with a special purpose vehicle named Swedish Automobile coöperatief U.A. (SPV). The license agreement relates to the non-exclusive rights in Saab Automobile's Phoenix architecture technology for a consideration of EUR 70 million.
As part of the transaction, Youngman has also signed a technology license transfer agreement with the SPV on purchasing the license and providing a guarantee for its payment of the license. This commitment of Youngman and the technology license agreement between Saab Automobile and the SPV are part of a bridge financing transaction. This bridge financing transaction and receipt of funds by Saab Automobile are still subject to finalization of definitive transaction documentation with the lender that will provide the bridge loan.
It is the intention to repay the bridge loan with the proceeds of the EUR 245 million equity investment of Pang Da and Youngman, which is still subject to approval of the relevant authorities.
SAAB AUTOMOBILE LODGES APPEAL AGAINST DISTRICT COURT RULING
Zeewolde, The Netherlands, 12 September 2011 - Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) today lodged their appeal against the District Court's decision last week to reject Saab Automobile's proposal for voluntary reorganization. The appeal will be heard by the Court of Appeal in Gothenburg, Sweden.
Saab Automobile is of the opinion that by rejecting the voluntary reorganization proposal based on the reasons cited in the rejection statement, the District Court went considerably further in its consideration than what the legislator intended. Saab Automobile is of the opinion that the District Court has left out of consideration that the District Court's assignment is to avoid pure abuse of the Swedish Company Reorganization Act and approval of a reorganization request shall be based on the provision of a limited amount of documentation. Thus, Saab Automobile is of the opinion that in its ruling, the District Court has applied a much stricter standard of proof than is required under the Act.
The documentation for appeal contains, among other things, a number of improvements Saab Automobile has implemented since the last reorganization. This includes a patent application for Saab Automobile-developed extended range propulsion technology (EREV) that would considerably reduce fuel consumption in next-generation Saab vehicles, as well as the Saab Automobile-developed modular vehicle architecture.
In the meantime, Swan and Saab Automobile continue discussions with several parties about obtaining additional funding for the short term. Pang Da and Youngman continue working on obtaining approval from the National Development and Reform Commission (NDRC) for their equity investments worth EUR 245 million in Saab Automobile and have no reason to believe that the approval process will not be completed, nor that there will be unexpected delays. The approval process is expected to be finalized early November. Youngman and Pang Da intend after the initial equity contribution to contribute with additional capital.
The EUR 70 million commitment of Youngman and the technology license agreement between Saab Automobile and a special purpose vehicle, as communicated in the press release of this morning, are part of a bridge financing transaction. This bridge financing transaction and receipt of funds by Saab Automobile are still subject to finalization of definitive transaction documentation with the lender that will provide the bridge loan. Saab Automobile expects to finalize this process by September 26. Furthermore, international banks have shown interest in taking over Saab Automobile's existing loans in order to add further liquidity to the company.
SAAB AUTOMOBILE CONFIRMS BANKRUPTCY FILING BY SWEDISH UNIONS
Zeewolde, The Netherlands, 12 September 2011 - Swedish Automobile N.V. (Swan) and Saab Automobile AB (Saab Automobile) confirm that Swedish unions Unionen and Ledarna filed for bankruptcy of Saab Automobile. The court has received the filing, but has not yet rendered a judgment which could take a few weeks.