Saab fans, we have some bad news: the automaker has cancelled its agreements with Chinese firms Pang Da and Youngman. As a result, Saab's future seems a little dimmer and grimmer.
If you've been following this story, you know that Pang Da and Youngman have been the only investors willing to give Saab the funds it needs to survive. (North Street Capital agreed to loans and equity swaps worth $70 million, but that won't keep the company afloat for long.) In total, Saab's Chinese suitors have been planning to offer the automaker $335 million in exchange for a 54% stake in the company.
In recent weeks, though, Pang Da and Youngman have begun quietly backing away from the deal, and their disinterest has not gone unnoticed. Today, Saab's parent company, Swedish Automobile, officially ended the Subscription Agreement into which the three entities had entered, meaning that Pang Da and Youngman's cash is no longer an option.
That said, Pang Da and Youngman haven't completely walked away from the table. In closed-door talks last Wednesday and again on Saturday, the two made a counter-offer to purchase 100% of the company. Saab has not released the details of those offers, but both were declined.
So where does this leave Saab?
Pang Da and Youngman's interest in Saab seems to be all-or-nothing. Our guess is that they aren't interested in being part-owners of a struggling company, but they wouldn't mind taking over Saab entirely to retool it in their own image.
Saab says that talks with Pang Da and Youngman are "ongoing", but from where we sit, there doesn't appear to be much room for discussion. And even if there were, Chinese authorities would still have to authorize the investment -- a scenario that looks highly unlikely, according to numerous sources.
That leaves Saab in the middle of a reorganization, with little cash to keep it afloat in the medium- and long-term. Worse, the man in charge of overseeing that reorganization, Guy Lofalk, has a very dim view of Saab's prospects, and on Friday, he asked Swedish courts to put an end to Saab's reorganization plans. Victor Muller -- the man who bought the company from GM last year -- plans to fight Lofalk in court, but given the fact that said court already rejected Saab's petition for bankruptcy protection just last month, we're not so sure that Muller will prevail.
So in sum, Saab hasn't produced a vehicle in six months, it's unlikely to get any cash from its Chinese investors, and it might not be allowed to reorganize. The company may, indeed, be nearing the end of the tunnel, but that bright, white light probably isn't the sort of exit Saab was hoping for.