Swedish Automobile, Saab’s parent company, has announced that it has entered into a EUR 25 million convertible bridge loan agreement with Gemini Investment Fund, thereby securing additional short-term funding.
The interest rate of the loan is 10% per annum and the conversion price is EUR 1.38 per share (the volume weighted average price over the past 10 trading days). Swedish Automobile may at any time during the loan's term redeem it without penalty and it intends to do so once the funding from Pang Da and Youngman is received, in which case no dilution as a result of this bridge loan will occur.
Upon receipt of Gemini's EUR 25 million and upon reaching agreements with its suppliers on payment terms, Saab Automobile hopes to complete its scheduled loan drawdown of EUR 29.1 million from the European Investment Bank (EIB).
As a result of this loan, the sale of the real estate and the sale of cars to a Chinese buyer, Saab secured EUR 66 million in additional funding this week.
Assuming the receipt of these funds takes place as scheduled, Saab expects to have secured the liquidity required to restart production hopefully within two weeks, subject to reaching agreement with its suppliers which includes feasible delivery schedules.
Victor Muller, CEO of Swedish Automobile and chairman of Saab, said: "I am relieved to report that we made the June salary payments this afternoon from the proceeds of the sale of cars we announced last Monday. We again extend our sincerest apologies to our employees for the hardship the late payment has caused to them.
“We have clearly gone through a very rough patch in the past few weeks and hopefully we can now reach agreement with our suppliers so as to ensure a resumption of our production in a controlled way. Our mid and long-term funding is secured by the Pang Da /Youngman agreements which are still subject to obtaining certain governmental approvals. Assuming these approvals are obtained, the Gemini bridge loan will be repaid in full."
See next week’s Fleet News for a special report on Saab.
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Gareth has more than 20 years’ experience as a journalist having started his career in local newspapers in the 1990s. Prior to joining Fleet News in 2008, he worked in the public sector as a media advisor and is currently news editor at Fleet News.
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