The owners of Koenigsegg Group are devolving into internecine warfare, even (especially?) as they attempt to buy Saab Automobile from General Motors. Swedish business daily Dagens Industri reports that the chaotic disputes between the principal shareholders threatens to torpedo the entire buying process. Norwegian businessman Bård Eker, who owns nearly 25 percent of the Koenigsegg Group, says if the disputes aren’t sorted out by Wednesday, September 30, he’s out. For good. Färdig. And who do we blame for this last minute brinksmanship? None other than deal-defenestrated California’s sub-prime tycoon, Mark Bishop.
Bishop, currently involved in Canadian group Omniarc, is reportedly trying to sell large quantities of Koenigsegg shares that he no longer owns. Bishop’s using a previously convicted Norwegian businessman as a front man. Bishop denies that he’s selling the shares in question—despite the fact that Dagens Industri has documentation proving that Bishop has commissioned Norwegian ex-con Thomas Oye to sell Koenigsegg shares.
What’s more, Thomas Oye confirms the deal. “Mark Bishop has asked me to find a buyer for his shares, “said Thomas Oye. Carnegie boss Anders Onarheim has also heard someone is trying to dump Koenigsegg shares—while Carnegie are trying to get the company $ 100 million in fresh money. “It’s not easy to sell shares if someone else tries to sell at a much lower price at the same time.”
For his part, Bard Eker calls Bishop’s machinations “an open wound.” In any case, it’s a race against the clock for Saab, the owner GM, the prospective buyer Koenigsegg, the unions and the Government—all of whom must act in concert to save the jobs of 3,500 employees and the future of the venerable automaker.
Money
Koenigsegg Group claimed to have gathered together 700 million SEK (MUSD 100) for a deal that will cost between $1.5 to $1.8 billion. In theory, the difference will come from an EIB loan (offer expires October 31st) and Beijing Automotive. But many have wondered why the people fronting the purchase are not those assuming the majority of the risk. And now it becomes clear that Norwegian investment bankers Carnegie have decided to stop a share-issue planned to bring in close to 700 million SEK. Questions are being raised; is this the $100 million that the Koenigsegg group were to going to invest “out of their own pocket?”
GM’s benevolence
General Motors has invested nearly $10 billion to jettison the “born from jets” brand. GM will continue to run Saab if the deal drags on beyond the end of next month. Meanwhile, Koenigsegg Group have to meet with certain key issues in the purchase agreement for it to remain valid.
Beijing Automotive
After failing to put up the funds to complete the purchase, Koenigsegg Group opened to other investors. Beijing Automotive jumped in. Despite promising to invest 3 billion SEK ($420 million), their money is supposed to have zero influence on running the future company. The Chinese automaker would have us believe that that Beijing does not get any power—a patently absurd assertion considering that they would put in the lion’s share of the money needed to keep Saab alive.
Mark Bishop
There is considerable uncertainty about what sort of ownership the American Mark Bishop has in the Koenigsegg Group. Bishop was outed/left the deal but his shareholding is apparently uncertain when the purchase is still not implemented. The dispute between Mark Bishop and the rest of the Koenigsegg Group threatens the whole affair.
Dropouts
Mark Bishop was the driving force of the Koenigsegg Group’s original bid for Saab. After Bishop dropped out, Augie K Fabel—the group’s other (financially) strong man—does not want to be the front man for the Koenigsegg Group. But what is he afraid of? Why is it that they want to avoid being scrutinized? Koenigsegg Group are now searching for a person to head the board and take Fabela’s role.
So a group with no cash and no leader is going to take over an automaker, keep the Chinese majority shareholder from interfering and make it profitable? Good luck with that.
Nice try by the Swedes, but this story has no chance of even approaching the Porsche/Piech saga. Unless the Swedish Bikini Team somehow gets involved.
Funny thing. I stopped by a Saab Dealer a couple of weeks ago. Someone had printed out the name “Koenigsegg” and taped up copies above the name “Saab” everywhere it could be found in the showroom, on the doors, on the receptionist’s desk, etc. I had to laugh at their optimism, especially since they admitted they were stocking their used car lot with other-brand cars since new Saabs weren’t moving at all and there was little demand for used ones.
An alternative interpretation is that GM never really wanted to ditch any of the brands and just needed time, and giving the impression of doing something, in order to get out of the bankruptcy procedure and into public coffers.
They may not have been listening carefully and it is fully possible that the strategy will backfire somewhere but if your whole professional life you believed that more brands is better and that what’s good for GM is good for the US (and that the others for some bizzare reason do not see it that way) a ploy of that kind is certainly not beyond the imaginable :)
In which case the Saab suitors and RHJ / a Sberbank financed Magna become much more attractive suitors than someone, who could definitely and demonstrably pull the deal off (aka a serious automotive company – not that one was really interested).
Kristjan Ambroz :
i think you’re close to something, i think its more likely they are terrified they will loose more sales if they drop any brand, ignoring that they are loosing money on each sale anyways.
for GM to change and succeed it takes alot more of aggressive thinking. i mean look at toyota and the fj cruiser, its not a i-fit-some-niche vehicle with the generic grill/face, it looks totally different than any other vehicle in toyotas lineup. why cant GM for example, take the hummers, at least the h3 and sell it alongside
cadillacs. they sure are for the same target audience (bling bling) etc.
or keep the enclave out, have only cars as buicks,
and later on merge buick & GMC as an near lux brand.
or if they had the balls to sell opels as chevys, and not even fiddle with saturn. now what they have is, opel is gone, the subpar daewoos will be sold as chevys which is like yuck.
GM delayed Saab’s inevitable failure. Once the Prius became the car of choice in Acedamia Saab would have failed anyway. Honestly, they built crap, some of it interesting, but interesting crap is still crap.
The problem as I see it is they never prepared to sell Saab and Opel and since there many patents and proprietary items that each hold, letting those go with the company and those buyers seeing that just buying a name and some manufacturing facilities is not worth the money that the ever “our way or the highway” GM attitude pushes away these suitors so that in the end GM “hopes” to hold onto both. It’s just a Chinese firedrill and I’m not sure if they can survive. You gotta know that without new products and the publics eroding perception of their viability they are treading water at best. Oh? Hummer? Yaeh likes that gonna fly! In a recovering economy next year they might find some fools to buy their public offering, but not many. Barack’s patience with GM’s mis, bad, conceited management will end and they will fail in a recovering economy.
Last one out, leave the lights on as a reminder of our (GM) arrogance. Rode that horse ’till it died underneath me, bastard!
While Barak’s patience with the management at GM may run out, the fact that his party is beholden to the UAW will keep the lights on at GM…at least until January of 2013.
I doubt GM want to hang on to Saab as it has done little for them since they picked up a share in ’92.
The original story seems to be rumor only, saabsunited.com has more on the story.
Time will tell, but I hope it works out.
“Good luck with that.”
I just wish the TTAC guys could come up with a less overused, cliched phrase for their -30- tag.
Kristjan Ambroz / european:
Your theory of a GM terrified to lose anymore of its octupus arms is a valid one, especially on the heels of losing their crown jewel Opel. Now if they lose Saab, what does GM have left in Europe to peddle, besides Cadillacs in small numbers.
John, SWEET picture!! Love the Swedish flying fish!
@Mkirk
Your comment about Saabs, Priuses and academics gave me a huge brainstorm — GM should have made Saab the anti-Hummer. Rather than try and elbow into the “sports sedan” category against BMW or the “near luxury” category against the Japanese and Volvo, GM should have made Saab the “thinking man’s car,” with environmental consciousness at the forefront — including hybrids.