By on August 26, 2010

When Spyker bought Saab from GM, they bit off too much than they can chew.  Spyker is upside down, under water, or whatever you call it when you have negative equity. They just announced that their debt exceeds their capital. And it looks like they have been dipped by GM: “The negative equity is due to the preferred shares that were issued to GM.”

Preferreds are both equity and debt instruments. Spyker keeps its books according to the Euro-centric IFRS (International Financial Reporting Standards), not according to the U.S.-centric GAAP. Under INFRS, preferreds must be kept on the books as debt if redemption is beyond the control of the company or if dividend must be paid on a periodic basis.  You need money to pay those dividends.

Spyker has never made a cent in profits. In 2009, they had €19.24m losses on sales of €6.6m. A company like that can’t afford Saab. Oh, well. GM was used to selling cars to people who can’t afford them. Why not whole car companies?

According to Automobilwoche [sub]  Spyker wants to wait with further comments until they presented their half year report on August 27. As a listed company, Spyker has 5 days to declare itself after the capital is exhausted. Automobilwoche: “Whether Spyker has to declare bankruptcy or whether they can find new capital is unsure.”

Collateral damage: BMW. BMW wanted to deliver engines for the Saab crossover 9-4X and possibly for the Saab 9-3. That  deal appears to be on ice for the moment.

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28 Comments on “Spyker And Saab In Deep Trouble...”


  • avatar

    surprise!!!

  • avatar
    PartsUnknown

    How ironic. I just today received an e-mail from the local Saab dealer (Shaw Saab) that they just got their first allotment of the new 9-5 sedan. A future collectible before it’s even been sold.

  • avatar
    PartsUnknown

    How ironic. I just today received an e-mail from the local Saab dealer (Shaw Saab) that they just got their first allotment of the new 9-5 sedan. A future collectible before it’s even been sold.

  • avatar
    Autojunkie

    I think I can! I think I can!

    C’mon Saab! You can do it!

  • avatar
    dwford

    At least GM got Saab sold so when it folds, the blood won’t be on their hands.

  • avatar
    lawmonkey

    But I saw a Saab commercial for the first time yesterday! I don’t think I’ve EVER seen one before…all this lead up with no follow through is going to inspire a lot of blue bb’s

  • avatar

    It’s going to be hard to find investment when Spyker already has some shady Russian money in it, aside from the fundamentals of it being a very risky investment.

  • avatar
    CJinSD

    Isn’t financial collapse just a phase in Spyker’s business plan? The profits come when the Russian mafia gets access to Swedish government supplied bailout Euros.

  • avatar
    porschespeed

    Car company + involvement of Russian = predetermined fail.

    The best part is we just played this scenario out with a British boutique auto company.

    Yet still, someone, somewhere, thought somehow things would work out when Teamsters East got involved.

    Since we recently sold a US basketball team to an oligarch, I guess we are just incapable of learning.

    • 0 avatar
      morbo

      As a Sixers fan, I have a soft spot in my heart for the Nets whenever they encounter financial difficulties. Selling there ABA soul to the Sixers (and Dr. J) netted us a championship last time.

      But for cars, meh. They’ll just sell Saab to the Chinese or something.

  • avatar
    Dave M.

    At least GM got Saab sold so when it folds, the blood won’t be on their hands.

    Yes it will. GM has been the tumor for 20 years. Spyker is just playing Hospice.

  • avatar
    Ashy Larry

    Struggling, rarely-if-ever profitable carmaker selling uncompetitive cars and not much else worth attention other than interesting concepts sold to struggling Dutch carmaker that loses 4 euros for every euro it brings in? How could that have been a recipe for salvation for Saab?

    To paraphrase Marlo Stanfield, Saab is already dead, they just don’t know it yet. Saab’s been dead for about 5 years.

  • avatar
    snabster

    Isn’t this why Spyker is being listed on the Stockholm NASDAQ exchange — to get GAAP accounting, and so the preferred stocks don’t count as debt?

  • avatar

    There were reasons GM wanted to fold Saab. That and Saabs situation in the past 30 years was completely lost on internet enthusiasts though. Saab is toast and it looks like Spyker will be too.

  • avatar
    PeriSoft

    Hang on here – they knew for sure that they wouldn’t be pulling in any real new money from Saab sales so early in the run. And they supposedly had a big chunk of operating capital supplied to keep going until that point.

    So why’s there a big surprise now? I find it difficult to believe that they were running on the assumption that they’d be profitable by the time the first dealers had a couple of cars to show off, and that they just plowed forward without any operating capital.

    What’s really going on here? More selective Saab reporting by TTAC? Or truly unprecedented myopia even by car industry standards?

  • avatar

    As the Germans and others realize that as platforms get smaller, transverse front-drive is really the only way to maximize interior room. BMW wants to chase down some VW/Audi market share. Which shouldnt be that hard. BMW should quit beating around the bush and just buy Saab. What would it take? $150M cash? Thats chump-change to BMW. Look what theyve done with MINI.

  • avatar
    Avtopromenade

    Awww well no surprise here… everything the Americans touch ends in failure sooner or later. Never mind Spyker, people know whom to blame.

  • avatar
    Paul W

    In Sweden, the morning news papers went with this story a few days ago, but NONE of the big car sites chose to publish it. In fact, readers who mention Spyker’s questionable financial situation in the comment section are unanimously being scorned.

    The Saab news that do get published include a story on how Saab sales in Sweden have risen dramatically compared to last year, and the new “flexible” platform that will used for the new Saab 9-3, scheduled for 2013.

  • avatar
    jkross22

    This story reminds me of the Elon Musk divorce news – Musk claims he has nothing, and therefore loses nothing in the settlement.

    I get the sense this song and dance is simply a different version of that. No one really knows what the hell is going on, except Spyker.

  • avatar
    Dave M.

    Awww well no surprise here… everything the Americans touch ends in failure sooner or later.

    Common sense tells us that if Ford hadn’t stepped in and grabbed Jaguar 20 years ago, there’s no way they would have survived as an independent until now. As well, with the hugely increased relaibility Ford brought to them.

    Conversely, Daimler did nothing but ass rape Chrysler. Perhaps financially they served as a short term white knight, but they left little but a hollow corpse in their wake.

    Finally, I imagine someday Honda will have to shack up with someone bigger. I bet it’ll be BMW.

  • avatar
    mpresley

    SAAB is the answer to a question no one is asking. Their last best hope was for them to make a play for some Chinese money, but now it’s doubtful that even the Chicoms would care. Besides, ever since Ingmar Bergman died, and now that leftist college professors have a Prius to drive (or maybe even a Volt although I doubt that even Marxist English professors are that stupid), what is the point?

    • 0 avatar
      PeriSoft

      With trenchant observations like this, it’s surprising you’re not a professional journalist… I mean, I know that politics and car manufacturing intersect, but “There’s not point in Saab because the commies don’t care and the… uhh… commies are driving Toyotas”? That’s the best you can do? I’m kind of surprised you didn’t also manage to get in an all-caps ‘OBAMA’, a dig at GM, and something about contrails.

    • 0 avatar
      mpresley

      Dear Mr Perisoft: Saab will never make it big in the Asian East since real Communists don’t like torque steer; they mostly turn leftward. And I intentionally refrained from mentioning Chairman Maobama. After all, he’s a GM man (there I go…).

  • avatar
    Paul W

    Remember that Spyker has been granted big loans from the EIB that the company hasn’t used yet, so there is no immediate threat of running out of cash.

  • avatar
    AnthonyG

    Sounds like the MG Rover situation all over again, although things seem to be speeded up this time, 6 months rather than 5 years to go bankrupt.

    BMW will not buy Saab – they do not need it and are terrible at managing other brands anyway. The shareholders would never allow it either. Mini they effectively created – it was orginally one model, not a company.


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