Swedish government happy to see Saab sold for $1million to a buyer that wouldn’t have been able to buy

The Swedish government has long been on my $h1tlist when it comes to Saab dealings. They like to position themselves as friends of the Swedish automotive industry with measures such as the automotive aid they offered back around 2008/9, which no-one took up because the repayment requirements were absolutely ridiculous.

The truth, however, when it comes to Saab, is that they couldn’t wait to see the back of it. They dragged their feet on the Koenigsegg deal, leading the consortium to pull out of the deal. They ignored findings from their own Debt Office about Saab’s proposed property deal.

Today, Swedish Radio have a story from a report into Saab’s bankruptcy where Guy Lofalk tried to do a backdoor deal to sell Saab for just $1 million to Volvo’s parent company, Geely. And the kicker is that the Swedish government, guarantors for Saab’s financial commitments to the EIB at the time, were apparently happy to go along with it.

FYI, it’s estimated that NEVS eventually paid around $274million for Saab, so Geely would have been getting quite the discount.

According to the report, Geely Chairman Li Shufu actually met with Swedish Finance Minister, Hans Lindblad to discuss the transaction, but Saab weren’t invited. The Ministry doesn’t deny a meeting took place but have declined to divulge the subject. In case you forgot, this was the future of a major Swedish-based, publicly traded industrial business they were discussing, without anyone from the business itself actually, you know, being there.

You might also remember that the Chinese government had a major role to play in any transaction involving a Chinese buyer. Hawtai previously had their hopes to buy into Saab dashed when the Chinese government made it very clear that Youngman was their preferred buyer. They had been given the right to act first and such a right is not just handed around. The fact that neither Lofalk or the Swedish Finance Ministry knew this just shows how off base they really were.

May the fleas of a thousand camels infest all their armpits.

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14 Comments

  1. I hope Uppdrag Granskning has a smoking gun for their claims. So far, from what I have been reading in the Swedish press, it is once again Muller’s word against Lofalk’s word.

  2. Just a small correction… The Swedish Minister for Finance (or Finance Minister) is Anders Borg – the one with the ponytail. The Hans Lindblad that is referred to is/was a State Secretary at Ministry of Finance.

  3. I have a question about this, and it is not political but rather just about the actual amount that changed hand at the sale… For whom (except the lawyers, that is…) would it be a difference if the price of the bankruptcy estate had been say $1 million instead of this $274 million? Have any of the average-size suppliers gotten any money at all back for their claims now that the bankruptcy is settled? Or were there any elephants in the room (authorities, GM, banks…) that basically took everything and would have done so unless the price-tag on Saab had been extremely high?

    1. The BIG difference is that the company was not in bankruptcy at the time when Lofalk tried to sell to Geely and he hade no right to do so if not Saab owner told him to do so.

      1. Yes, I know, I was merely doing a Gedankenexperiment. And I know that the bankruptcy lawyers duty is to get the most out of the estate. But to whom would it have mattered if the Saab bankruptcy estate were sold for $274 million, or $1 million, or even the symbolic sum of SEK 1? Would it be any different for the small creditors or are they without money anyway? Of course, NEVS would probably be in a better position if they bought for SEK 1 and then spent the rest of the money to get Saab up and running – which in the end could have meant new contracts for the creditors earlier on in the process and maybe less payments from unemployments fund, etc. Just a thought… Obviously they paid $274 million for it and I wonder exactly where those money went.

        1. You’re thought experiment is not easy to answer. At the time when Lofalk tried to sell Saab behind the owners’ back, there were hardly any debts. So if Lofalk and the swedish state had been succesful in selling for one million US dollars then it would have been Swedish Automobile (Spyker) that would have lost many millions of dollars. Now SWAN lost millions of dollars anyway.

          But today when most of Saab Automobile was sold to NEVS, it is the creditors of former Saab Automobile that are the losers, because the selling price is much, much lower than the claims. But if creditors get any money is yet to be decided, as the bankruptcy estate is still alive. There is still work to be done, and the 274 million US is used to finance the work, and then the majority remaining money will be divided in order to creditors.

  4. $1M to a multinational, or $274M to a new consortium?

    I don’t think it would’ve been than bad having Geely as the corporate parent. Volvo, despite their recent troubles, have done quite good under that umbrella and production hasn’t seen the exodus to China many feared. A Geely purchase would’ve merged operations with Volvo, so not sure if the Saab name would’ve remained intact?

    1. Well we’ll have to see about that now that Geely is trying to sell off shares to other Chinese companies. Obviously that must mean that Geely cannot finance the bleeding Volvo Cars on its own. The question is if several part owners of Volvo Cars will have any effect in this area.

  5. Its still early days with Greely. From the sounds of it, Volvo is in a bit of a pickle at the moment with massive changes to its business model underway.

  6. The devil is in the fine print on these deals. $1 million and assuming $273 million in debt = $274 million buying price. Of course, the money changing hands would be just $1 million. Thus, the terms are very, very important.

    Like a number of those commenting above, I’d certainly be interested to know exactly how all of that stacked up.

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