SPYKER: further strategic and financial details regarding its acquisition of Saab

Spyker believes that through the purchase of Saab it has a rare opportunity to acquire and rebuild a global car brand which will be repositioned towards an independent performance-oriented niche car company with an industry-leading environmental strategy.

Saab’s brand DNA is unique and rooted in its aeronautical heritage, innovative and independent thinking and its Swedish origins. Spyker fully supports Saab’s Business Plan which will be implemented by Saab management. The Business Plan, drawn up by Saab management over the past ten months, was analysed by Spyker in assistance with Booz & Co and KPMG Transaction Services, advisors to Spyker. The Business Plan has also been analysed and supported by several advisors to the Swedish Government and the EIB.

At the General Meeting, Spyker Cars N.V. intends to adopt a resolution to change its name to Saab Spyker Automobiles NV (”Saab Spyker”). This entity will operate Spyker and Saab as two separate operating companies, each focused on its distinct target markets with their respective vehicle lines. As previously stated, Saab Spyker is committed to execute the Saab Business Plan. It is the intention to enhance it in several areas. The highlights of Saab’s strategy will be:

• Saab will be a stand-alone niche manufacturer with three to four model lines: 9-3 (sedan, hatchback, sports estate, X and convertible) and 9-5 (sedan, sports estate and X) and the 9-4X for both the US and European markets. In addition, Saab will investigate the potential of adding a fourth smaller car line (”9-1″) in due course provided that the positive development of the smaller car segment continues. However, this model is currently not envisaged in the Business Plan so if the outcome of the investigation is positive, additional financing to develop this model could be required.

• Saab’s product portfolio will be renewed completely, beginning with the launch of the new 9-5 early this summer, the new 9-4X in early 2011 and the new ‘all Saab’ 9-3 in 2012.

• Saab will continue to be repositioned against other brands such as Audi (A4/A6) and BMW (3/5 series) as a premium brand, leveraging its strong and unique brand heritage.

• Saab’s Technical Development Center in Trollhättan has full capability in developing complete vehicles and will continue to do so. In areas such as safety, environment, driving characteristics, practicality, turbo technologies and several other innovations, the Saab brand is among the best in the industry.

• With Trollhättan as one of the most efficient mid-size car plants in Europe, production and sales volumes are aimed to be rebuilt to recent pre-crisis levels of about 100,000 to 125,000 vehicles including the 9-4X built in Mexico.

• The current dealer network will be re-energized with a new sales and distribution approach in certain markets, which will be implemented during 2010.

• The economies of scale of the on-going collaboration with GM after Closing the acquisition (February 2010) will continue to be leveraged in sourcing via ancillary agreements, with independent sourcing gradually increasing to reduce GM dependency and obtain improved access to other suppliers and the co-development of unique innovations.

Saab Spyker believes that its two brands, both deeply rooted in aeronautical and automotive history, will benefit from sharing certain assets and technology services. Examples include but are not limited to:

• Saab’s extensive global network of 1,100 dealers.

• The extensive engineering know how and innovative technologies available at Saab.

• Sharing of activities in marketing & sales: i.e. merchandising, promotion & sponsorship activities, etc.

In the future, the two brands will be able to share certain parts and components and expect to obtain access to supplier and partner resources not available to Spyker or Saab individually today.

FUNDING OF SAAB

The Saab Business Plan requires approximately $1 billion in peak funding for Saab in advance of the return to profitability, forecast to occur by 2012. The funding is provided in part by GM, through $326 million Redeemable Preference Shares (”RPSs”), and in part through other contributions, which concern various substantial contributions to the funding of Saab’s Business Plan on favorable terms for supplies by GM to Saab and deferred payments from Saab to GM. The remaining amount, apart from cash at bank, is to be provided by a EUR 400 million loan from the European Investment Bank for certain R&D projects at Saab. Securing this EIB loan is a condition precedent to closing of the Saab acquisition (”Closing”).

With this financing in place, the business plan does not envisage any future funding being required, neither from Spyker or elsewhere, for Saab to return to profitability. The business plan targets car production and sales at or below historical levels of 100,000 to 125,000.

Related articles by Zemanta

• Spyker releases more details on Saab purchase, promises new 9-3 for 2012 (autoblog.com)
• Spyker Says It Expects Saab to Be Profitable by 2012 (Update3) (businessweek.com)
• Spyker Sets Targets for Saab as It Seeks to Raise Cash (nytimes.com)
• Spyker: Saab will be profitable by 2012 (seattletimes.nwsource.com)

• Spyker will need more money to sell more Saabs
• Spyker to sell sportscar business
• Spyker speculation about Saab may be true
• SPYKER RENEWS OFFER FOR SAAB !
• Spyker CEO denies plan for joint Genii bid for Saab
• Saab closer to sale as Sweden seeks EU approval
• India’s Mahindra reportedly interested in Saab

• Spyker will need more money to sell more Saabs
• Spyker to sell sportscar business
• Spyker speculation about Saab may be true
• SPYKER RENEWS OFFER FOR SAAB !
• Spyker CEO denies plan for joint Genii bid for Saab
• Saab closer to sale as Sweden seeks EU approval
• India’s Mahindra reportedly interested in Saab