EIB green-lights Swedish Automobile property sale as Saab eyes production restart

Part of the Saab gambit for survival has been approved by the European Investment Bank. Saab's parent company, Swedish Automobile, has been requesting approval for a plan to sell part of the property that its factory sits on in Trollhättan to a group of real estate investors led by Hemfosa Fastigheter and then lease the land back. The transaction has been given final approval by not only the EIB, but also the Swedish government and the country's National Debt Office.

It's sure to be a sigh of relief for Saab, as the purchase of 50.1 percent of shares in Saab Property AB gives an infusion of 205 million Kronor (around $32.4M USD) which helps in the ongoing discussions with suppliers as Saab aims to restart production. Saab says it is going to take advantage of the traditional summer shutdown to get its house in order with suppliers and other short-term funding sources, and it aims to restart production by Tuesday, August 9. Check out more details in the official release after the jump.

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Zeewolde, The Netherlands, 7 July 2011 - Swedish Automobile N.V. (SWAN) announces that Saab Automobile AB (Saab Automobile) obtained final approval from the EIB, the NDO and the Swedish government for the sale and lease back of the Saab property.

The consortium of Swedish real estate investors led by Hemfosa Fastigheter, and including among others, Brinova Fastigheter AB, PEAB and Weland Fastigheter will purchase 50.1% of the shares in Saab Property AB for a total consideration of SEK 255 million, reflecting an adjustment to the transaction price for a one year lease free period. Of the SEK 255 million consideration, SEK 205 million will be paid in cash on closing and the remaining SEK 50 million in the form of a sellable bond convertible into shares of the purchasing company. The investors have the right to increase their commitment to SEK 300 million within 30 days after closing on similar terms. The parties will proceed to closing the transaction today.

With this transaction SWAN and Saab Automobile will have raised about EUR 61 million in additional funding commitments over the past weeks. Saab Automobile continues its discussions with its suppliers on materials supply and commercial terms and is close to reaching agreements. SWAN and Saab Automobile continue their discussions with several parties to obtain further short-term funding to be able to restart and sustain production, including completion of a drawdown under the EIB loan facility.

Given the fact that some of Saab Automobile's suppliers require a longer lead time to resume adequate supplies and the delay as a result of the summer shutdown period at many of Saab Automobile's European suppliers, Saab Automobile plans to restart production by Tuesday August 9, provided that the above criteria are met.

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