Sabo encounters “life and death” again

Swedish Saab Automobile once again encountered "life and death."

On the 21st, the Swedish automobile president Victor Muller said that the Swedish automobile refused to accept the full acquisition of Saab's proposal by the Zhejiang Youth Car of China and the huge auto trade. On the following day, Guy Lofalk, Saab auto reorganization manager, filed an application to the Swedish court to suspend Saab's reorganization. On the 28th, the Swedish court will formally decide Guy Lofalk's suspension of reorganization application.

Although Guy Lofalk proposed to suspend the reorganization, Saab Automobile introduced a new investor and received $70 million in equity investment and loans. However, Saab still faces the danger of bankruptcy liquidation. If the outcome is really the end of Saab, the pre-investment of young cars and huge automakers may be overdone.

In response to the rejection of the full acquisition and the possible suspension of the restructuring, Pang Qinghua, chairman of the huge automaker who has invested in Saab’s active performance, also chose to remain silent.

Kearney’s global partner, Sun Jian, told the First Financial Daily that, judging from the current situation, the huge automakers and youth cars are a little bit embarrassed. If they continue, they may get deeper and deeper; but they stop there. In that case, the initial investment may be difficult to recover.

Shadowed Restructuring Saab Motors, which has done everything possible to finance the reorganization process, received a US$70 million equity investment and loan commitment from US hedge fund North Street on the 20th. However, this did not make Sabo happy.

Of the 70 million U.S. dollars in North Street, 10 million U.S. dollars are used for equity investments, and 60 million U.S. dollars are for loans. Swedish Motors stated that on the 21st, North Street purchased 2.38 million Swedish cars at a price of 4.19 euros per share, which accounted for 10% of its outstanding shares. Swedish Motors stated that the loan of US$60 million will be secured by Saab’s assets and that the documents will be ready on the 24th. Cash will arrive within 2 days.

However, Guy Lofalk believes that these cashes are far less than the funds needed for Saab's voluntary reorganization. In his view, the initial voluntary reorganization of Saab vehicles included financing plans but lacked specific content.

Therefore, after Lombark introduced the new investment for several hours, Guy Lofalk filed an application to the court to suspend the reorganization, which puts Saab's reorganization into a shadow again.

On the 28th, the Swedish court will decide that Guy Lofalk suspended Saab's reorganization. Once the court approves Lofalk's application, it means that thousands of Saab's employees who are in arrears and debt providers will ask Saab to go bankrupt.

The Swedish car said in a statement that it will oppose the suspension of the reorganization and demand that the voluntary reorganization continue. At the same time, Swedish cars also asked the court to replace Guy Lofalk, the reorganization manager.

Currently, in the debt enforcement agencies, only 150 suppliers have filed claims for approximately 250 million Swedish kronor.

In order for the voluntary reorganization to proceed smoothly, the Swedish car sold Spyker on September 29 for a price of 32 million euros. The buyer was North Street.

Guy Lofalk believes that for Saab, the viable option is for Chinese companies to buy the entire Saab vehicle. He said that at the beginning, the huge automobile trade and youth cars would like to buy Saab, but they have not reached an agreement.

The rejected full acquisition Victor Muller said on the 21st: "The formal takeover of Saab's proposal is unacceptable because it may lead to changes in the control clause, or it will lead Saab to an end."

While refusing to fully acquire the proposal, Swedish Automobile also asked the two Chinese companies to confirm compliance with the previously signed agreement. However, the Swedish car said in the statement, "Confirmation has not been received and both parties' discussions are still ongoing."

After the total acquisition was rejected, how to deal with the current situation, Pang Qinghua said that there is nothing to say for a while, and new information will be released in a few days.

In the June non-binding memorandum of understanding, the youth car and the huge automaker will receive a 53.9% stake in Saab Automobile for a total of 245 million euros.

Regarding the risk that the huge automakers and youth cars may leave, Mueller stated that Saab has also formulated the B plan and is not worried that Chinese companies will withdraw because of the proposal. However, Muller said that the relevant details will be announced only if the B program is activated.

After the signing of the agreement, the huge automobile and youth vehicles invested 58 million euros in the name of car purchases. Not too long ago, Young Cars also paid a part of the 70 million euro bridge loan.

From July’s holdings to the current full acquisition, the youth car and the huge automobile trade think that “the environment has changed since the agreement was signed”.

Among them, Guy Lofalk's reorganization suspension application is the biggest risk. Industry insiders believe that once the application is approved, the investment in the huge automobile and youth automobile will be overdone.

Not long ago, related parties had told reporters that November 15 was the deadline for the signing of a memorandum of understanding between Damascus Motors, Young Auto and Swedish Auto. If the National Development and Reform Commission does not approve the passage, the cooperation agreement will be lifted.

The person also said that the share price was the average price of Swedish car stocks ten days prior to the date of approval of the China Development and Reform Commission, with a maximum of no more than 4.19 euros/share.

Sun Jian said that he had exchanged views on Saab's reorganization and had been with some of Kearney’s partners in Europe. The conclusion was rather pessimistic. He believes that after the turmoil since March, Saab's dealer system, supplier system and its own management backbone have basically dispersed, Saab wants to make a comeback is not a simple matter.

He said that the Chinese company's participation in the reorganization of Saab vehicles is entirely an irrational and intuitive decision. In the current situation where the information is fully adequate and the funds are not lacking, Chinese companies should not invest overseas in a “leakage” mentality.