Saab to resume production after securing short-term loan

Production at Saab's Trollhättan, Sweden plant has been shut down for weeks due, as these things often are, to a lack of cash needed to pay suppliers. That should change in the next week, though, as Saab parent Spyker has announced that it has secured a convertible loan agreement with Gemini Investment Fund Limited worth 30 million euros.

The Swedish automaker says the loan will help reboot the plant, but Saab is also counting on a 29.1-million-euro draw-down from the request to the European Investment Bank, which will reportedly arrive next week. With both loans, Saab says in the post-jump press release that it will be able to resume production at Trollhättan, pending a delivery schedule agreement with suppliers.

The loan, which matures in six months and carries a seven-percent interest rate, will act only as a stopgap measure to enable a production restart. Saab is reportedly also trying to strike a deal with a Chinese automaker to help stabilize its operations and provide much-needed funding. Saab is said to be continuing to work out a deal with Russian businessman Vladimir Antonov, who hopes to own 30 percent of the automaker. Hit the jump to read over the press release.
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Trollhättan, Sweden: Spyker Cars N.V. (Spyker) announces that it secured the short-term funding of Saab Automobile AB (Saab Automobile) by entering into a EUR 30 million convertible loan agreement with Gemini Investment Fund Limited (Gemini).

Spyker entered into a EUR 30 million convertible loan agreement with Gemini with a 6 months maturity. The interest rate of the loan is 7% per annual and the conversion price is EUR 4.88 per share.

In addition to the receipt of EUR 30 million from Gemini, Saab Automobile will make a drawdown request to the EIB for an amount of EUR 29.1 million. As a result of the convertible loan and the EIB draw down - which is expected next week – Saab Automobile secured an amount of EUR 59.1 million. With the receipt of these funds, Saab Automobile secured the liquidity that is required to restart production.

Saab Automobile aims to restart production within a week, pending agreements on delivery schedules with its suppliers. In order to improve lead times to customers and dealers on existing and future orders, Saab Automobile will work together with its suppliers to minimize any impact from the recent production stop.

Spyker and Saab Automobile continue to work on securing medium and long term funding.

Victor Muller, CEO of Spyker and Chairman of Saab Automobile said: "I would like to apologize to our dedicated employees, suppliers, dealers and customers for the disruptions of the past weeks. We will do everything in our power to restore the confidence in our company as soon as practically possible."

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