Saab secures investment from China et al

Saab has secured an investment and short-term funding from China’s Hawtai Motor Group. €120M for 29.9% and €30M short term funding.

As you can’t have failed to notice, Saab has stopped production because it’s run out of money. And despite the best efforts of Vladimir Antonov to throw money at Saab, the EIB and the Swedish Debt Office seemed unwilling to move quickly to allow Saab to get back in to production. But things they are a-changing.

Over the last few days it’s been announced that Saab has acquired €30 million funding from Gemini Investment Fund Limited, Vladimir Antonov will be allowed work a sale and lease-back arrangement on Saab assets (and is seeking to become a 30% shareholder) and that a further €29.1 million is coming from a drawdown of the EIB loan.

That alone would be enough to get Saab back to work this week – once suppliers have been paid and accepted guarantees about future payment – but there’s much more. After all, if you’re going to secure funding you may as well go the whole hog.

Saab has announced that they have reached an agreement with Chinese car maker and clean diesel engine specialist Hawtai Automotive for an investment of €150 million by Hawtai in Saab.

The agreement is for Hawtai to take a 29.9% stake in Saab for €120 million and provide €30 million in short term funding, repayable in six months at 7%pa. Alternatively, the €30 million can be converted to stock at €4.88.

Additionally, Tenaci Capital is converting €42 million of loans in to stock which will reduce Saab’s interest payment substantially.

Not surprisingly, all these shenanigans are subject to the approval of the Chinese government, EIB, Swedish NDO, Uncle Tom Cobley and all.

In many ways this is what should have been done at the start of the Spyker/Saab deal. But at least now Saab should have sufficient liquidity and funding to get back on track.

And a big entry point in to the critical Chinese market through Hawtai.