Saab receives a multi-million lifeline from the United States
If you have been following along with the incredible saga that has become the Saab brand, the name North Street Capital should sound familiar. This is the American equity firm that shelled out $44 million in late September to purchase the Spyker Cars division of Swan (click here for more on the sale of Spyker) but with today’s announcement, North Street Capital will contribute roughly $10 million through the purchase of Swan stock along with loaning the automaker another $60 million. The $10 million for what amounts to 10% of Swan’s outstanding stock is expected to be received by Friday while the additional $60 million loan is due by October 26th.
Unfortunately, the good news of an additional investor with deep pockets and a willingness to invest comes with some bad news that could get worse. As part of the government-aided restructuring process, the Swedish government appointed an administrator to oversee the progress while the feds are protecting the company from bankruptcy claims and suits. The administrator’s name is Guy Lofalk and evidently, Mr. Lofalk is not impressed with the efforts made by Saab and Swan so he plans to file the paperwork requesting that the government terminates the protection and reorganization period. Should Mr. Lofalk’s advice be accepted, Saab and Swan will be left to face multiple bankruptcy claims that would almost certainly force them out of business.
Saab and parent company Swan plans to appeal Mr. Lofalk’s request, using this recent investment of $70 million from the US equity firm to pay the bills during the reorganization process. Saab also has the hedge fund money that was received last week with help from Youngman Lotus but the company now questions the timeliness of the delivery of the $97 million. Saab has received $15 million of this financing announced last week (click here for a closer look at that deal) but while the other $82 million was expected by the end of October, the company is now concerned that the rest of that money could take longer to arrive. Luckily, Saab should have another $70 million US dollars in which to work with – provided that the Swedish government holds up their end of the deal and protects the automaker from the hoards of angry creditors
Other Saab News:
Swedish Automobiles sells Spyker Cars to US equity firm
Saab gets some Chinese money, lives to see another day
Saab looks to cut jobs during restructuring
Saab lives, government protection granted
A third Swedish labor union demanding Saab bankruptcy
Source: Automotive News