With a Halloween deadline to get its restructuring back on track looming, Swedish Automobile has rejected an offer by Youngman and Pang Da to buy 100% of Saab’s shares. Moreover, the struggling Swedish brand has canceled the existing agreement with Youngman and Pang Da, its erstwhile would-be rescuers. A Saab presser notes:
Today, Swedish Automobile N.V. (Swan) announced that it has given notice of termination with immediate effect of the Subscription Agreement of July, 2011 entered into by Swan, Pang Da and Youngman.
Swan took this step in view of the fact that Pang Da and Youngman failed to confirm their commitment to the Subscription Agreement and the transactions on the agreed terms contemplated thereby as well as to explicit and binding agreements made on October 13, 2011 related to providing bridge funding to Saab Automobile AB (Saab Automobile) while in reorganization under Swedish law.
Pang Da and Youngman have presented Swan on October 19 and 22 with certain conditional offers for an alternative transaction for the purchase of 100 percent of the shares in Saab Automobile which are unacceptable to Swan. However, discussions between the parties are ongoing
So, what exactly happened? Per SvD.se [via Google Translate],
The rejected bid for Saab from Youngman and Pang Da was around 200 million SEK (about $30m), according to new information. An improved bid is expected before long, but the parties are not close.
Victor Muller has had a telephone meeting with Rachel Pang representing Youngman and a representative from Pang Da – while also continuing negotiations with the U.S. investment company North Street Capital.
The Chinese 200 million bid for Saab, according to several sources, concerned 100 percent of the shares of Saab Automobile. It was made last Wednesday and effectively reflects the market capitalization of the parent company Swedish Automobile (Swan). This offer was subsequently rejected. After this, Guy Lofalk requested an halt to the reconstruction.
So, $30m for 100% of Swedish Automobile… that’s less than Saab needs each month just to keep the lights on in a “nuclear winter” scenario (about $50m). And yet Muller and Swedish Automobile won’t give up… although they are having to up their daily Kool Aid intake. Saab’s online mouthpiece at inside.saab.com gives some insight into the company’s current state of self delusion, writing:
Saab doesn’t have a debt crisis. We have a liquidity crisis. Our debt is manageable if we are producing and selling vehicles. In that scenario, the value in the company is much greater than our present market capitalisation.
We are a fantastic company, building great cars designed by fantastic people and we have a market for them. What we don’t have at this second is the lubricant needed to get the machine moving – cash.
There are other entities out there who recognise this and will be attracted to investing in Saab and that scenario is better than a lowball offer such as the one that our board has just said no to.
We have time pressures, for sure. But it ain’t over yet. Not by a long shot.
Speaking of those time constraints, SvD adds
Time is of the essence. On Tuesday the wages are due. On Thursday, must, in principle, an agreement of some kind be completed – because Saab need to show the district court that it is worth continuing reconstruction. Otherwise, bankruptcy awaits.
And speaking of bankruptcy, Saab’s court administrator lays out the grisly endgame (and provides some much-needed counterpoint to Saab’s baffling optimism) in an interview with Swedish TV, translated by Saabsunited.
Svt: Have there been any money at all?
GL: We have got some smaller amounts like twice 4.5milion dollars and once 1.5 milion dollars so we have been able to keep our nose above the surface.
Svt: How come no money arrived sofar?
GL: What I have seen is that the parts have not found an agreement about the deal that was suppose to bring those 70 milion euros. There has been a lot of discussions about this agreement and thats why no money have been transferd.
Svt: So you think that a reconstruction is no longer current because there is not enough liquidity?
GL: The liquidity is about to end so we can not continue the legal process so we have to terminate.
Any questions? Anyone? Bueller? Well, start shutting off the lights… the sad story of Saab’s demise shouldn’t take longer than another week or so.