Saab’s owner Swedish Automobile NV (Swan) has ended its agreement with potential Chinese investors Pang Da and Youngman. The deal with Pang Da and Youngman – for the two companies to purchase a 53 per cent stake in Saab for 245 million euros (£215m), as well as loaning some vital short-term funding – started to unravel when the Chinese firms tabled an alternative offer to buy the manufacturer outright.
Pang Da and Youngman claimed they were changing the offer to a 100 per cent buyout because “circumstances had changed” since they forged the original agreement with Swan in July. Saab owner Swedish Automobile NV (Swan) described that offer as “unacceptable” – and also began to doubt whether it would receive a further installment of the 70million euro bridging loan it had agreed with Youngman.
Although initial loan payments were received, the latest portion of bridge funding was supposed to arrive on 22 October. That money would have been enough to secure Saab’s immediate future, but its failure to materialise prompted Swan to cancel the agreement with the two Chinese firms.
The move means Swan is now open to talks with other companies. One interested organisation is US equity firm North Street Capital, which last week tabled an offer of a share purchase and a £40m bridging loan as the precursor to further potential investment in the Swedish car builder.
The limbo means Saab is unable to progress with production or launches of new cars such as the 9-5 Sportwagon, the 9-4X, or to continue its plans to expand with fresh models like the 9-3.
This week the car firm will learn whether it will continue to be protected by the voluntary reorganisation process that is currently giving it respite from its creditors. The administrator in charge after Saab’s affairs, Guy Lofalk, has filed an application to terminate the process. A district court in Sweden will decide whether to uphold Lofalk’s request on Friday.
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