Spyker Claims 2012 Profit Goal For Saab

spyker claims 2012 profit goal for saab

Spyker has set the goal of turning a profit with its newly-purchased Saab division by 2012, reports Automotive News [sub]. That effort will be led by a total of three Saab products: the existing 9-3 (with a new version rumored for 2011), the forthcoming 9-5 sedan and, later next year, the GM-built Saab 9-4X Crossover. Other models, including a 9-1 compact are being hinted at, but Spyker acknowledges that such a product would require about a billion dollars more than Saab-Spyker currently has access to. Meanwhile, those three vehicles will have to generate 100k-125k annual sales in order to keep the business plan rolling along. Saab-Spyker honcho Victor Muller has an almost shockingly confident take on this possibility, telling Reuters:

It’s all about the restoration of the confidence in the company. Customers have been very reluctant to buy because of the uncertainty surrounding the brand… Saab has to do nothing but regain its existing and old customers because that in itself would be in enough to create a very strong business model..

Saab sold a total of 8,680 vehicles in the US over the course of 2009. Globally, the firm sold 39,903 units last year, down from 94,751 in 2008. Perhaps the challenge is a bit more difficult than Muller lets on.

Muller says Spyker-Saab (the name change will become official on the 12th of this month) requires “peak funding” of about one billion dollars to complete its turnaround. $326m of that funding comes as development aid from GM, which will receive that amount in redeemable preference shares in Saab. $400m is set to come from a European Investment Bank loan that, while guaranteed by the Swedish government, could still be rejected (for good reasons) by EU regulators. But the financial troubles don’t end there.

Apparently $50m of $74m cash portion of the deal has been funded on a 50-50 basis by a loan from an investment vehicle of Muller’s, and shares predominantly issued to GEM Global Yield Fund Ltd for which it has received a €150m credit facility. Another $24m is due on July 15, but has yet to be funded. According to the company, “Spyker has been approached by various investors to fund this instalment. Spyker intends to finance this amount primarily through senior debt.” Saab-Spyker assets have been pledged to GM as security for this as yet unfunded final payment.

It’s not immediately clear when or how Muller intends his investment vehicle’s $25m investment to be repaid, and indeed this new investment vehicle is also raising concerns among investors. Spyker was required to buy out mobbed-up Russian plutorcrat Alexander Antonov before GM approved the deal, and this new investment vehicle was the way to get it done. But, Muller refuses to reveal who exactly is behind the fund, telling Reuters that a confidentiality agreement prevents such disclosure. This is being seen within Holland [via nrc.nl]as yet more evidence of Muller’s infatuation with risky, creative financing.

Under Dutch law, Muller’s ownership of over 30 percent of the new combined firm would require him to make a public offer within 30 days of the deal closing. Per Reuters:

although he did not indicate he would make a public offer for the company, Muller said his options include selling shares in the market, selling shares to an investor, or making a public offer for the company.

But he added any public offer would be made against the average price of Spyker shares over the past year and that investors would be unlikely to offer their shares at that price given that the offer price would be below the current market price.

Spyker shares, which debuted at €15.50 per share in 2004, had risen to about €6.8 last week, and have since fallen to about €3.5.

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  • ClutchCarGo ClutchCarGo on Feb 02, 2010

    "Muller refuses to reveal who exactly is behind the fund, telling Reuters that a confidentiality agreement prevents such disclosure." And Vinny "No Nose" Spilatro is very serious about that confidentiality. He don't like nobody sticking dere noses inta his bidness.

  • Tparkit Tparkit on Feb 02, 2010

    As long as Muller is working to line up the $1 billion in funding, the forecast is for hype on steroids. At a minimum, he has to provide sound bites that give political cover to the bureaucrats who will approve state subsidies.

  • MaintenanceCosts The sweet spot of this generation isn't made anymore: the SRT 392. The Scat Pack is more or less filling the same space but it lacks a lot of the goodies, including SRT suspension, brakes, and seats. The Hellcat is too much and isn't available with a manual anymore.
  • Arthur Dailey I am normally a fan of Exner's designs but by this time the front end on the Stutz like most of the rest of the vehicle is a laughable monstrosity of gauche. The interior finishes suit the rest of the vehicle. Corey please put this series out of its misery. This is one vehicle manufacturer best left on the scrap heap of history.
  • Art Vandelay I always thought what my Challenger really needed was a convertible top to make it heavier and make visability worse.
  • Dlc65688410 Please stop, we can't take anymore of this. Think about doing something on the Spanish Pegaso.
  • MaintenanceCosts A few bits of context largely missing from this article:(1) For complicated historical reasons, the feds already end up paying much of the cost of buying new transit buses of all types. It is easier legally and politically to put capital funds than operating funds into the federal budget, so the model that has developed in most US agencies is that operational costs are raised from a combination of local taxes and fares while the feds pick up much of the agencies' capital needs. So this is not really new spending but a new direction for spending that's been going on for a long time.(2) Current electric buses are range-challenged. Depending on type of service they can realistically do 100-150 miles on a charge. That's just fine for commuter service where the buses typically do one or two trips in the morning, park through the midday, and do one or two trips in the evening. It doesn't work well for all-day service. Instead of having one bus that can stay out from early in the morning until late at night (with a driver change or two) you need to bring the bus back to the garage once or twice during the day. That means you need quite a few more buses and also increases operating costs. Many agencies are saying for political reasons that they are going to go electric in this replacement cycle but the more realistic outcome is that half the buses can go electric while the other half need one more replacement cycle for battery density to improve. Once the buses can go 300 miles in all weather they will be fine for the vast majority of service.(3) With all that said, the transition to electric will be very good. Moving from straight diesel to hybrid already cut down substantially on emissions, but even reduced diesel emissions cause real public health damage in city settings. Transitioning both these buses and much of the urban truck fleet to electric will have measurable and meaningful impacts on public health.