Today, Swedish Automobile N.V. (Swan) announced that it has terminated the Subscription Agreement of July, 2011 entered into by Swan and Chinese companies Pang Da and Youngman.
As mentioned by Saab’s officials, this step was taken due to the fact that Chinese distributor Pang Da and manufacturer Youngman failed to confirm their previous commitments. Specifically the plan was to supply Saab with long term funding after approval was given by the Chinese government: but things never really seemed to fall into place. Both Pang Da and Youngman were supposed to supply bridge funding by the first October, but that never happened. Instead, an alternative transaction was presented.
Although the alternative offer was found simply “unacceptable”, the Swan officials stated that “discussions between the parties are ongoing”.
Meanwhile, Saab is waiting for a court decision on whether or not to lift its bankruptcy protection. “Saab doesn’t have a debt crisis. We have a liquidity crisis. Our debt is manageable if we are producing and selling vehicles.” say the company’s officials.
For the reorganization to continue, the court must see that Saab has cash to pay for immediate expenses. On Oct.20, Saab said it received a $70 million funding pledge from North Street Capital LP, a Greenwich, Connecticut- based private-equity firm. Now, with the Chinese offer closed, Saab can battle with the Swedish Reorganization firm to allow the American investment company to take stock in the manufacture.
The history of Saab starts in early 1937, when Aeroplan Aktiebolaget (Swedish Aircraft Company) was founded and revealed its first prototype passenger car 10 years later after the formation of the Saab Car Division. Later becomes known as Saab AB, Saab Automobile was acquired by General Motors in 1990 partial and in 2000 fully. During 2010, the company was sold to Spyker Cars N.V. (now Swedish Automobile).