Fresh cash, new Chinese partner set to revive Saab
AFP/The Local · 2 May 2011, 22:10
Published: 02 May 2011 22:10 GMT+02:00
- Saab debts mount as cash search continues (02 May 11)
- Losses continue for Saab owner Spyker (29 Apr 11)
- Sweden’s Saab - back to the future? (28 Apr 11)
"Spyker entered into a €30 million ($44.6 million) convertible loan agreement with Gemini Investment Fund Limited with a six month maturity," the company said in a press release.
The loan at an annual interest rate of seven percent sets a price of €4.88 per share in case of conversion.
In addition to the loan from Gemini, Saab will request a loan drawdown of €29.1 million from the European Investment Bank (EIB) -- which the company said was expected next week, securing a total of €59.1 million.
The drawdown forms part of a €400 million loan secured from the EIB last year.
"With the receipt of these funds, Saab automobile secured the liquidity that is required to restart production," the company said.
Saab also announced on Monday it had set up a "strategic partnership" with China's Hawtai Motor Group, although the company remained vague on details of what the deal may entail.
Speaking with the TT news agency, Victor Muller, Spyker's chief executive and Saab Automobile chairman, called the deal "very important", but refused to provide any further information, instead referencing a press conference scheduled for Tuesday in Beijing with Hawtai vice chair Richard Zang.
Spyker bought Saab from General Motors in January 2010, but has been struggling to find funding to keep the embattled Swedish car manufacturer running.
Saab was forced to halt production at the beginning of April due to a dispute over unpaid bills.
"Saab automobile aims to restart production within a week, pending agreements on delivery schedules with its suppliers," it said in the statement.
"I would like to apologise to our dedicated employees, suppliers, dealers and customers for the disruptions of the past weeks," said Muller.
Saab on Monday welcomed the announcement, saying it hoped the short-term injection would enable it to come to an agreement with suppliers to help it to resume production.
"Which means that we can produce cars and sell cars and get our business (up and running) throughout the whole chain," company spokeswoman Gunilla Gustavs told AFP in Stockholm.
Spyker and Saab continued to work on securing medium- and long-term funding, Spyker said.
"The priority is to get production going again and then of course we are still working on the long-term funding," added Gustavs.
She said Muller was in China "and is having discussions with Chinese car manufacturers and that would be more of a long-term solution."
Sweden's national debt office on Thursday approved controversial Russian businessman Vladimir Antonov as a new investor in Saab.
A former Spyker shareholder, Antonov was blocked from taking a stake in the company when Spyker bought it from GM last year because of concerns over his business dealings and rumours of ties to organised crime.
Earlier this month, the Swedish government gave Saab the green light to sell its property -- including its plant in Trollhättan, western Sweden – to raise funds to start up production.
The plan calls for the Swedish National Debt Office (NDO) to release its security in Saab Property to guarantee the EIB loan to Saab.
The Swedish government however said the deal still needed approval from the EIB.