The endless Saab story continues. Just when we think the end is near, something happens and Saab is rescued. Then we think their future just might be secured and everything falls through. It truly is a drama if we’ve ever seen one. The latest twist in this story comes today with an announcement of new financing.
The last spate of bad news for Saab came when it seemed unlikely that Pang Da and Youngman Automotive would provide the bridge funding needed for the company’s reorganization period. It seemed as if the two partners were backing out of their joint venture deal. Following this, Saab and its partners declared the whole flap a misunderstanding, and announced that some of the funding was delivered.
Today, Saab reports that is has gotten new funding, from a most unlikely source – North Street Capital, a private equity investment firm in the United States. You might remember North Street as the company that is intending to purchase Spyker.
The reason Saab looked to someone else for the funding is based on Pang Da and Youngman’s past unreliability. In other words, they want to avoid another round of “Saab is dead” coverage. The money from Pang Da and Youngman is due in full by October 22nd and it has yet to be delivered. The deal with North Street involves a $10 million purchase of shares in the Swan joint venture, as well as a $60 million loan with Saab’s assets as collateral. Assets like Spyker, maybe? Who knows. But wait, there is more. Saab’s administrator in charge of reorganization, Guy Lofalk, has applied to have Saab’s reorganization status terminated. Saab, naturally, is appealing the decision, releasing a statement saying:
“Saab Automobile shall contest this application and request for continuation of the voluntary reorganization process. Simultaneously, Saab Automobile shall apply at the court for replacement of Mr. Lofalk as administrator.” This story isn’t over yet.