Zeewolde, The Netherlands – Uncertainty over its purchase by Chinese companies and GM’s unwillingness to supply technology and vehicles to these potential new owners may force Saab into bankruptcy. The company has issued a report following a meeting of its shareholders.
On October 28, Swedish Automobile N.V. (Swan), Saab’s parent company, entered into a memorandum of understanding (MOU) for the sale of Swan to Chinese company Zhejiang Youngman, and the sale of its Saab shares to Pang Da for €100 million. The final agreement is subject to certain conditions, including approval by several parties including the Swedish and Chinese governments, the European Investment Bank, and General Motors.
The MOU is valid until November 15, 2011 and is contingent on Saab Automobile remaining in reorganization. On November 7, General Motors announced that it would not agree to the continuation of its existing technology licenses or to the supply of 9-4X vehicles to Saab should the company’s ownership change. Swan and Saab are currently into discussion with GM, as it is uncertain if the parties can sign the purchase share agreement before November 15 without GM’s consent.
On September 29, Swan announced that it had reached a conditional agreement with U.S.-based private equity firm North Street Capital to sell its Spyker sports car business for approximately €32 million. Swan is currently in discussion with North Street regarding the sale.
Swan stated that even if it sells Saab and Spyker, the total proceeds will not allow it to fully meet its liabilities. Swan’s future depends on the outcome of negotiations with Pang Da, Youngman and North Street, and if it is not able to complete the sale of Saab or secure further financing for it, it may result in Saab’s bankruptcy. If it cannot sell Spyker, Swan may continue to operate it, providing that necessary funding for that business can be obtained.
If Swan can sell the Saab Group but continue the activities of the Spyker business, which it did before acquiring Saab in 2010, it will focus exclusively on Spyker. If it sells both Saab and Spyker, Swan will consider all of its options, including a voluntary liquidation of Swan.