Some Swedes Can’t Wait For Saab Going Down The Drain

The first Sports Cars are considered to be (though the term would not be coined until after World War One) the 3 litre made in 1910 Vauxhall 20 hp (15 kW) and 27/80PS Austro-Daimler (designed by Ferdinand Porsche).

Sweden’s Dagens Indudstri, the financial paper most hated by the Saab faithful, has dug up another interesting twist in Saab’s concentric circles around the drain: There is one party that is checking daily whether Saab has finally gone belly-up: The consortium of real estate developers that a month ago bought 50.1 percent of Saab’s land, factories and improvements for around $40 million.

This was considered about 30 percent below market. Nevertheless, a lot of people doubted the sanity of the consortium, which is backed by a large Swedish insurance agency. After all, the tenant is Saab, and with its current references, the company would have a hard time renting an apartment in downtown Stockholm. Dagens Industri just found out why the consortium is quite happy with its distressed tenant: If Saab can’t pay the rent, the consortium gets the whole shebang for no extra money.

According to Saab’s press release, Saab signed a 15 year lease on the property. What was not in the press release was what Dagens Industri heard from what DI deems a reliable source. DI was told that the remaining 49.9 percent in the property are pledged as a security for the 15 year lease. First of all, Saab cannot sell off any of its remaining shares. Second, if Saab defaults on the lease, and bankruptcy would be a big case of a default, the rest of the property would go to the consortium to compensate for loss of lease payments, switching costs and sundry annoyances. Again, this is as DI heard it.

In case of a Saab bankruptcy, “the consortium would get all of the property for $ 40 million,” says DI, and explains: “In other words, the price per square meter would be cut in half.”

Dagens Industri tried to confirm that scenario. Saab’s PR department claimed ignorance as far as the lease arrangements are concerned. Jens Engwall, CEO of Hemfosa, did not return DI’s calls. “None of the other leading executives of Hemfosa want to confirm or deny the matter,” writes DI, and sounds pretty sure of itself.

DI recalls what Erik Paulsson, a key figure in the consortium, had said in early July: “”If we cannot build cars, we can make car parts etc. … Spare parts alone would be huge.”

The faithful who worry about Saab going under because they won’t get parts for their old Saabs could look forward to this outcome. Parts production would be in the hands of well-financed people.

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