For the past few weeks, Saab Automobile and its parent company, Swedish Automobile N.V. have been scrambling to secure additional funding to, among other things, pay its employees. Finally, the Swedish manufacture announced that they have obtained the means to pay the wages of its workers by way of an outside convertible bridge loan agreement. The 25 million EUR loan agreement was made with Gemini Investment Fund Limited, an international investment outfit. This loan brings Saab’s total received funding to 66 million EUR over the past few weeks.
“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,” said Swedish Automobile N.V. CEO Victor Muller.
Read Saab’s full press release below.
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Trollhättan, Sweden: Swedish Automobile N.V. (SWAN) announces that it entered into a EUR 25 million convertible bridge loan agreement with Gemini Investment Fund Limited (Gemini), thereby securing additional short-term funding.
SWAN entered into a EUR 25 million convertible bridge loan agreement with Gemini with a 6 months maturity. 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). SWAN 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 convertible bridge loan (EUR 25 million), the sale of the real estate (EUR 28 million) and the sale of cars to a Chinese buyer (EUR 13 million), Saab Automobile (conditionally) secured EUR 66 million in additional funding this week. Assuming the receipt of these funds takes place as scheduled, Saab Automobile expects to have secured the liquidity required to restart production hopefully within 2 weeks, subject to reaching agreement with its suppliers which includes feasible delivery schedules.
Victor Muller, CEO of Swedish Automobile and chairman of Saab Automobile 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.”
