In an unexpected twist to a story full of completely expected twits, U.S. private equity firm North Street Capital has stepped up with $70 million to help Saab.
If North Street Capital sounds familiar, it's because they've worked with Saab before. In late September, North Street Capital purchased Spyker from Swedish Automobile (Saab's parent) for $43 million. North Street Capital is headed by Alex Mascioli, a noted car enthusiast.
The deal with North Street came about because Swedish Automobile N.V (SWAN) "has doubts that the bridge funding of Youngman and Pang Da, of which a partial payment has been received, shall be paid in full on 22 October 2011."
$10,000,000 of North Street's money will be repaid via 2,386,635 shares of SWAN at a price of 4.19/share. The money will be used as working capital. This deal will be paid in full be Friday.
The other $60,000,000 is a loan backed by collateral in the form of assets owned by Saab Automobile. Both parties plan to close this deal by Monday, October 24.
But it's not all good news for Saab. Despite the loan, Saab has been notified by the administrator of the voluntary reorganization, Mr. Guy Lofalk, that he plans to apply for termination of the voluntary reorganization. The voluntary reorganization is a type of bankruptcy protection that shields Saab from having to pay its creditors during a transitional time. If the protection is revoked, Saab would have to start paying off its debts. Saab plans to file a motion to remove Lofalk from the position of administrator.
The big question here revolves around the unnamed assets that Saab backed up the $60,000,000 loan with. Venture capitalists rarely throw good money after bad...at least not if they plan to stay in business for very long. And considering that NSC already owns one car maker, gaining control of a production facility doesn't seem like a terrible idea.
fernando63 says:
10:43 AM, 10/20/11
Not so fast: http://www.highmotor.com/guy-lofalk-enviaria-saab-leones.html
minibro77 says:
11:06 AM, 10/20/11
No habla Espanol fernando :-)
kain77 says:
11:32 AM, 10/20/11
lawl. You guys really love that Saab "display" at the Detroit Auto Show. It almost makes me bad for them.
stovt001 says:
09:21 PM, 10/20/11
Well that picture does a really good job of summarizing Saab's status in a nutshell.
greenpony says:
10:00 AM, 10/21/11
It's like a soap opera. I find myself wanting to just fast forward to the end.