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
Whenever a CEO says “bankruptcy is not an option,” you know the game is up. After complaining in this Swedish Radio interview (in English) that his court-appointed administrator is trying to sell Saab off wholesale to the Chinese, Victor Muller trots out Churchillian and Nietszchian calls to arms… in fact, he does everything short of bursting into a spirited rendition of “I Will Survive.” Unfortunately, Muller’s credibility is long gone, and he doesn’t help himself by trying to portray Lofalk as some traitorous backstabber. With Saab months (years? decades?) into its death-flails, and the most recent “rescuer” turning out to be a non-player, is it any wonder Lofalk wants to hand over the mess to the only viable companies involved (especially when Muller calls North Street a “strong partner”)? Muller continues to labor under two basic delusions: first, that he can sell a majority share to the Chinese while keeping Saab an essentially Swedish (or at least European) company and second, that anyone cares whether Saab becomes a Chinese company. Sorry Victor, there’s just nothing left here to fight for…
With both China’s NRDC and Sweden’s NDO appearing unready to approve the Chinese takeover of Saab before a Halloween bankruptcy deadline, it seemed that Saab was properly borked. Without Vladimir Antonov or Gemini Investment Fund to hit up for yet another “bridge loan,” we fully expected to see Saab placed into bankruptcy a week from Monday. But if Saab’s parent company, Swedish Automobile, had found a private equity fund that was gullible enough to rush in where Antonov feared to tread and drop $44m on Spyker… well, we should have known that North Street Capital would be fool enough to get sucked into the Saab maelstrom. And sure enough, Reuters reports that
The private equity firm of racing car enthusiast Alex Mascioli, which bought the luxury sports car business of the Dutch owner of Saab in September, is to invest $70 million in the cash-strapped car maker as Chinese bridge financing looks uncertain.
No, it’s not a special-edition 911 with a few extra horsepower and leather-wrapped mirror-adjustment levers. Nor is it a water pipe built to the most exacting standards ever imagined by German engineers. No, Porsche has a freaking palace for sale, Schloss Bullachberg to be precise. Conveniently located in Bavaria’s castle district, near some of Germany’s most famous castles, Bullachberg was once the seat of the von Thurn und Taxis dynasty… and can now be yours for an undisclosed sum. The Frankfurter Allgemeine Zeitung reports that Porsche bought the property five years ago, for some six million Euros, with plans to turn it into a luxury resort hotel for “kaufkräftig” (literally purchase-powerful) customers and management retreats. Fast forward through one financial crisis and one overambitious attempt to buy Volkswagen, and Porsche has decided to let the property go. But be warned, as the FAZ reports that
only the most necessary work was done on the building’s upkeep.
Now that Ferrari even has its own amusement park (conveniently begun before the financial crisis), there’s no way Porsche will ever match its Italian rival in terms of cross-branded destination tourism. Which is fine. After all, we’re talking about car companies here… right?
Today’s Rasmussen poll results, which show that Americans are arguably less likely to buy from a bailed-out automaker, raise some interesting questions. Like, does receiving a bailout constitute an inviolable black mark on an automaker? Do the size of the bailout, and the amount the government recovers make a difference? With a presidential election looming, these factors are worth knowing: after all, the government still has the choice of when to divest its shares in GM. And with GM’s stock down over 40% from its $33 IPO price last November, the government is looking at a significantly larger loss than it would have endured had it divested immediately aftter the IPO. So, should the government dump now, anticipating larger losses in the near future, or should it hang on in hopes of a rebound, increasing the risk that “Government Motors” will become a political hot potato going into 2012? The latest clue, via CNBC, remains as cryptic as ever…
Republican leaders in the House of Representatives want to halve the balance of a U.S. government loan fund established to help the auto industry make more fuel efficient cars and trucks.
If plans to shift some $1.5 billion from the Energy Department advanced technology fund to disaster assistance are carried out, serious questions would be raised about Chrysler’s ability to fully capitalize on its bid for new financing.
I have neither the arrogance nor the cash to show any disdain toward the DOE process.
Chrysler also cites its ability to secure the DOE loans as a major risk factor in its latest 10-Q SEC filing. And with only about $10.2b in cash and equivalents on hand at the end of June, there’s a chance that this attack on the ATVM loan program could deal a body blow to Chrysler’s finances. Here’s hoping Sergio has kept the runt of the bailed-out automaker litter from dependence on this apparently corrupt, and politically vulnerable loan program.
The national character of auto brands is a tricky thing. For decades, Volvo wore its Swedishness on its sleeve, emphasizing the values that made Ikea, Abba and Swedish porn so popular in the US… even when it was an outpost of the Ford empire. And then the unthinkable happened: Chinese up-and-comer Li Shufu bought the brand and rolled it into his Geely empire. In the world of national-character-branding, being bought by a Chinese firm is something like hiring Casey Anthony as a brand ambassador, or using a mascot called “Mr Melamine Milk” (another nightmare scenario can be found here). So, how does a brand like Volvo, that was built on Swedishness, get past the “China Factor”? By doubling down on Swedishness? How about by building cars in the US?
Bloomberg [via the Financial Post] reports that “one of the five biggest European banks” is “close” to loaning Saab $157m so that it may pay workers and suppliers, in order to move towards restarting production. According to DI.se, the deal is predicated on Saab securitizing the loan with shares of Saab Great Britain or other “alternative assets.” But apparently whatever the banks ask for, Saab will try to give, as Theodoor Gilissen Bankiers analyst Tom Muller explains
They need the money immediately. I hope they solve it this week, otherwise I think it’s over for Saab. It’s a very dire situation.
Saab has already warned its workers that paychecks due tomorrow could be delayed until “committed” funds from investors arrive, but Bloomberg reports that the warning may not be enough. According to the report
Any delay in the August payments will prompt the unions immediately to start a process aimed at ensuring state coverage of wages in the event of the carmaker’s failure, officials from the IF Metall and Unionen labor groups said. The unions, after gaining employees’ backing, would first file payment requests with Saab. If salaries remain unpaid in seven days, the unions may then ask a district court to declare Saab bankrupt.
That could put Saab into bankruptcy in as little as two weeks. Saab’s long nightmare seems to be drawing to a close. (Read More…)
Opponents of red light cameras and speed cameras have had an impact on the bottom line of one of the world’s largest photo enforcement providers. Redflex Traffic Systems reported a “slowdown in the level of new contracts signed” that dragged the firm’s US traffic camera revenue down $2.4 million in the 2011 financial year. Redflex lost $1.5 million worth of US contracts this year. (Read More…)
I know I’ve said this several times before, but the end really is near for Saab. The WSJ [sub] reports that Sweden’s Debt Enforcement Agency began auditing Saab’s finances after several debts came due earlier this week, and found only 5.1 Kroner ($796,291) in its Skandinaviska Enskilda Banken account. That’s barely enough to cover the 5.06m Kroner in debts that came due this week alone… and Saab’s total outstanding debt is ten times that amount, around 50m Kroner. And as if the financial trouble weren’t dire enough, key stakeholders are abandoning Saab in embarrassment, like Benny Holmgren, one of Sweden’s largest car dealers. Holmgren tells SvD.se that his contract to sell Saabs has expired and that he won’t renew, explaining
“For me, it is important to be proud of the brands that we have in our halls. Saab does not deliver cars they promised, they do not pay wages to their employees, nor debts to their suppliers while the owners pick out big money. It does not feel right for a [my] car dealers.”
But among the hardcore Saab faithful, today is not a day of sorrowful resignation… but a day of totally overblown and unrealistic hope for their dying brand. Yes, really… (Read More…)
It’s been over a year since we’ve herd anything from the California EV startup Aptera, and the last we’d heard the firm was watering down its product and waiting for more funding. But apparently that’s not been panning out as Greencarreports.com hears that the firm is returning deposits due to delays in the production rollout. According to the firm
Our path to production has been longer than anticipated, which has complicated our reservation administration to the point that we have decided to return your deposit. … [Our credit-card processing system] is designed for transactions to be completed in a six-month window. Since most of Aptera’s deposits have been in reserve for more than six months, maintenance of the account has become problematic for our credit card processor and administratively cumbersome for Aptera.
Aptera says that existing depositors will be moved to a “new VIP database,” and
as our production date approaches, we will use the database to direct you to your local retailer so you can be among the first to own an Aptera vehicle.
One of the biggest clouds hovering over Better Place’s venture in Israel – and globally – is what stands behind the well-prepared presentations and thoroughly thought out, customer-oriented marketing. What makes the seemingly adventurous venture appealing to the business hounds investing their best capital in it? Such questions from journalists are usually answered with a neat smile, a corporate joke and a dry statement.
While Better Place still isn’t revealing its global business plan, it finally sheds some light on the numbers behind its Israeli venture, as part of a worldwide roadshow in preparation for the company’s upcoming $300 million capital raising.
Are we “out of the ditch”? While some in the world of financial analysis say the US is headed for a double-dip, Fiat-Chrysler CEO Sergio Marchionne reckons the worst is behind us, but that growth from here will be painstakingly slow. Right or wrong, at least Marchionne isn’t falling victim to the irrational optimism that traditionally infects the auto industry…
Just three weeks after Saab narrowly avoided being pushed into bankruptcy by supplier SwePart, SvD.se reports that three other suppliers have now initiated the bankruptcy process by requesting that Sweden’s national debt bailiffs pursue their debts. One Spanish supplier is reported to be foreclosing on €2m ($2.8m in debt), while two of the rebelling German firms are said to be owed at least €5m each. And though Saab says it is meeting with the Spanish firm to try to hammer out a deal, SvD reports that four of the 14 outstanding claims against Saab have run out of time. Lars Holmqvist, head of the European Association of Automotive Suppliers argues that, by paying some suppliers and not others, Saab is de facto bankrupt, and that a trustee should be brought in to pay suppliers in order of priority, rather than order of Saab’s necessity. Meanwhile, Saab CEO Victor Muller has been in Brazil and the US, trying to bring new investors on board, as its Chinese funding won’t be approved for two-to-three months, if ever. Meanwhile, “taxes and fees” must be paid by Friday, August salaries are due in just two weeks, and Muller cut his latest money-raising trip short to reassure workers back in Trolhättan. But according to thelocal.se, even the most optimistic of union leaders hope Saab will have a new CEO soon. Do I hear the fat lady warming up her vocal cords?
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