SWEDEN: Saab secures EUR25m bridge loan, pays wages, eyes restart
Victor Muller apologised to Saab workers for late June wage payments
Saab Cars owner Swedish Automobile (SWAN) on Wednesday said it had arranged a EUR25m convertible bridge loan with Gemini Investment Fund, "thereby securing additional short-term funding". It said it had paid employees' June salaries and now had sufficient liquidity to restart production within two weeks, subject to agreements with suppliers.
The EUR25m convertible bridge loan agreement with Gemini has a six months maturity. The interest rate is 10% a year and the conversion price is EUR1.38 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 EUR25m and upon reaching agreements with its suppliers on payment terms, Saab Automobile hopes to complete its scheduled loan drawdown of EUR29.1m from the European Investment Bank (EIB).
As a result of this convertible bridge loan (EUR25m), the sale of the real estate (EUR28m) and the sale of cars to a Chinese buyer (EUR13m), Saab Automobile (conditionally) secured EUR66m 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 two weeks, subject to reaching agreement with its suppliers which includes feasible delivery schedules," the automaker said in a statement.
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."