2011 Archives - SWEDISH AUTOMOBILE N.V.

SPYKER CARS CHANGES NAME INTO SWEDISH AUTOMOBILE Zeewolde
The Netherlands, 7 June 2011
Spyker Cars N.V. shall change its name into Swedish Automobile N.V. per 15 June 2011. Following the decision of the annual general meeting of shareholders on 19 May 2011, Spyker Cars N.V. shall have its articles of association amended on 15 June 2011. The amendment includes a change of name into Swedish Automobile N.V. Per 15 June 2011, the company shall be listed as Swedish Automobile N.V. Its ISIN code changes to NL0009816248, its ticker symbol to SWAN.

Information on Swedish Automobile
Reorganization, Bankruptcy and/or Sale of Company
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TRADING UPDATE SWEDISH AUTOMOBILE N.V. (including SAAB AUTOMOBILE AB) THIRD QUARTER 2011
Zeewolde, the Netherlands, 18 November 2011 – Swedish Automobile N.V. (Swan), a holding company that owns subsidiaries which produce and sell premium automobiles under the Saab and Spyker brands (together referred to as the “Group”), today issues a trading update for the third quarter of 2011 ended 30 September 2011. The Group is listed on NYSE Euronext Amsterdam (ticker symbol SWAN).
KEY DEVELOPMENTS
Saab Automobile AB, Saab Automobile Powertrain AB and Saab Automobile Tools AB (together Saab Automobile) entered voluntary reorganization under Swedish law

Longer term future and stability for Saab Automobile expected after signing of a memorandum of understanding with respect to a EUR 100 million conditional agreement on sale of all shares in Saab Automobile and Saab Great Britain Ltd. (Saab GB) to Pang Da Automobile Trade Company Ltd (Pang Da) and Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman)

Conditional agreement reached on sale of Spyker Automotive business to North Street Capital, LP with net proceeds for Swan of EUR 32 million

Efficiency improvement initiative launched as part of voluntary reorganization process, in order to create more flexible and competitive cost structure

Finalizing voluntary reorganization process, implementing revised business plan and restarting sustainable production top priorities for Saab Automobile management

Sales performance seriously affected by production stoppages and tight liquidity situation during third quarter
CORPORATE AND OPERATIONAL REVIEW
Voluntary reorganization under Swedish law
While work continued throughout the third quarter to secure short-term financing, Saab Automobile concluded in early September that, considering Saab Automobile’s limited financial resources and the time needed to secure the required approvals for the investments by Pang Da and Youngman, a voluntary reorganization would entail the best preconditions for using existing resources in the most efficient way. The purpose of the voluntary reorganization process was to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman.
Therefore, Saab Automobile applied for voluntary reorganization under Swedish law on 7 September with the District Court in Vänersborg. Eventually, on 20 September, the Court of Appeal in Gothenburg approved of the reorganization proposal by Saab Automobile. This decision also meant that bankruptcy filings by a number of Swedish labor unions became void, and these filings were shortly after withdrawn by the unions.
Following the ruling by the Court of Appeal, Swedish lawyer Guy Lofalk was appointed administrator of the reorganization process. As part of its application, Saab Automobile formulated a reorganization plan, which included a number of aspects aimed at lowering its cost-base and creating a viable, competitive and independent organization. This reorganization plan was presented to creditors in more detail at the creditors meeting on 31 October (see Recent Events). Saab Automobile furthermore announced it plans to fully redeem outstanding debts with creditors.
On the same day the Court of Appeal approved Saab Automobile’s reorganization proposal, Saab Automobile also launched an efficiency improvement initiative as part of a broader review of the company’s business plan for 2012 and beyond, aimed at creating a more flexible and more competitive cost structure for the company. The initiative is an important element of the reorganization plan that was presented at the creditors meeting on 31 October (see Recent Events). The initiative focuses on both fixed and variable costs and aims to create a lower and more flexible cost structure within Saab Automobile by eliminating duplication of work, streamlining processes, shortening lead times, improving coordination between departments and simplifying the organizational structure.
Other developments
On 4 July, Swan and Saab Automobile announced the signing of a conditional agreement with Youngman Passenger Car for the formation of a Sweden-based joint venture company for the development of three new product Saab models (NPJV). Simultaneously, Swan and Saab Automobile also signed binding agreements worth EUR 245 million with Pang Da and Youngman. As part of the agreements Pang Da agreed to invest EUR 109 million in Swan, while Youngman agreed to invest EUR 136 million. These agreements were terminated on 23 October (see Recent Events).
On 7 July, Swan and Saab Automobile announced that Saab Automobile obtained final approval from the EIB, the NDO and the Swedish government for the sale and lease back of Saab Property AB (Saab Property). A consortium of Swedish real estate investors purchased 50.1% of the shares in Saab Property for a total consideration of SEK 255 million (EUR 28 million), reflecting an adjustment to the transaction price for a one year lease free period. Of the SEK 255 million consideration, SEK 205 million was paid in cash on closing and the remaining SEK 50 million in the form of a sellable bond convertible into shares of the purchasing company. Following this transaction, this bond was sold to investors in two separate transactions.
On 22 July a supplier of Saab Automobile Tools AB (Saab Tools) filed for bankruptcy of Saab Tools, a subsidiary of Saab Automobile AB. The issue was resolved after Saab Tools reached agreement on payment terms with the supplier.
Payment of the July salaries for white-collar workers was delayed at the end of July. The salaries were eventually paid on 5 August after Swan issued 5 million new shares in the company under the EUR 150 million equity facility between Swan and GEM. On 15 August, Swan issued another subscription notice for 4 million shares to GEM. Payment of the August salaries was delayed as well, and eventually payment of the salaries for August and September was secured under the Swedish state wage guarantee scheme, as part of Saab Automobile’s voluntary reorganization process.
On 29 September, Swan announced that it had reached a conditional agreement on the main terms of the sale of the Spyker Automotive business to North Street Capital, LP (North Street), a US-based private equity firm. The indicative terms of the transaction envisaged net proceeds of approximately EUR 32 million once the agreement would become unconditional. These net proceeds are earmarked to redeem Swan’s debt to Tenaci Capital B.V. (Tenaci), since the Spyker assets are pledged to Tenaci. Victor Muller will stay on as CEO of Spyker.
Sales & production
Both sales and production in the third quarter continued to be seriously hampered by the production stoppages and tight liquidity situation at Saab Automobile. The lack of new cars coming into markets because of the stop in production continued to cause a very challenging business environment for all Saab sales points around the globe, while stock levels around the globe continued to fall as a result of the production stop.
Corporate developments
On 28 September, Swan announced it had reached agreement with Orange India Holdings S.a.r.l. (OIH) for the full and final settlement of several potential claims related to the sale of the Formula One team by Swan and its subsidiary Spyker Events & Branding B.V. (Spyker) to OIH in 2007. Spyker and Swan agreed to pay OIH an amount of GBP 2.5 million of which EUR 1.45 million was released from an escrow account. The remainder will be paid within 6 months from signing of the settlement. The settlement excludes the existing indemnity given by Swan to OIH for an alleged claim of Mr. Colin Kolles in the amount of EUR 1.2 million, which OIH disputes.
RECENT EVENTS
Pang Da and Youngman
On 23 October, Swan terminated the subscription agreement with Pang Da and Youngman that was signed in July, as Pang Da and Youngman failed to confirm their commitment to the subscription agreement and the transactions on the agreed terms contemplated thereby, as well as to explicit and binding agreements made on October 13, 2011 related to providing bridge funding to Saab Automobile while in voluntary reorganization under Swedish law.
However, discussions between the parties regarding an alternative agreement continued and on 28 October Swan entered into a memorandum of understanding (the MoU) with Youngman and Pang Da for the sale by Swan to Youngman and Pang Da of the shares that Swan holds in Saab Automobile and Saab GB for an aggregate purchase price of EUR 100 million. In line with the terms of the MoU, the total purchase price of EUR 100 million will be paid in the following manner:
EUR 50 million upon completion of the sale

4 instalments of EUR 12.5 million payable on the first, second, third and fourth anniversary of completion of the sale
Final agreement between the parties is subject to a definitive share purchase agreement (SPA) between Swan, Pang Da and Youngman, which will contain certain conditions. Amongst others, these conditions will include approval of the transaction by the Swedish Government represented by the Swedish National Debt Office (NDO), the European Investment Bank (EIB), the National Development and Reform Committee of the People’s Republic of China (NDRC), the shareholders of Swan and several other organisations.
The agreement in principle is that any outstanding intragroup loans and other financial obligations between Swan, on one hand, and Saab Automobile, its subsidiaries and Saab GB on the other (the Saab Auto Group), will be set off or written off in accordance with applicable law without any actual payment being due and payable. The draft SPA will also be based on the principle that Swan is to be discharged of all Saab-related obligations.
The validity of the MoU is also contingent on Saab Automobile remaining in reorganisation. The parties are currently in discussion about the SPA. General Motors (GM) publicly indicated on 7 November last that it will not agree to the continuation of the existing technology licenses or the continued supply of 9-4X vehicles to Saab Automobile following the proposed change in ownership of the Saab Auto Group. Swan and Saab Automobile are currently in discussion with GM. Without the GM consent having first been obtained, it is uncertain whether the parties are in the position to sign an SPA.
The conditional agreement and the related adjustment of Saab Automobile’s business plan and reorganization plan were well-received by creditors during the creditors meeting on 31 October in Vänersborg, Sweden. During the meeting, Saab Automobile presented the District Court in Vänersborg and its creditors with its preliminary reorganization plan and the Court decided that same day that Saab Automobile would be allowed to continue its voluntary reorganization process. On 31 October, Saab Automobile also announced it planned to reduce headcount by 500 jobs as part of a broader adjustment of the company’s cost structure to the existing financial and operational situation.
As a consequence of the termination of the equity investment agreements with Pang Da and Youngman, Swan’s shareholders have not been asked to vote on amendment of Swan’s articles of association nor to appoint new board members at the EGMS of 11 November 2011. During this EGMS the shareholders of Swan voted – during an informal vote – in favour of the potential sale of Saab Automobile AB and Saab Great Britain Ltd. by Swan. Approval by informal voting was also obtained for the continuation of negotiations which may lead to the sale of the Spyker business. A new extraordinary general meeting of shareholders will be convened to ask the general meeting to formally approve the sale by Swan of its shares in Saab Automobile and Saab GB.
Other events
Göran Ejbyfeldt was appointed new Vice President & Head of Manufacturing and Quality at Saab Automobile effective 1 December. Ejbyfeldt succeeds Gunnar Brunius, the current Vice President Manufacturing & Purchasing, who will pursue new career opportunities. Ejbyfeldt will assume responsibility of manufacturing on top of his current role as Executive Director Quality, Environment & IT. Kjell-Åke Eriksson was added to Saab Automobile’s top management team as Executive Director Purchasing, reporting directly to CEO Victor Muller.
THE FUTURE OF SWAN
If Swan sells the Saab Auto Group and the Spyker business as currently envisaged, the total (net cash) proceeds will amount to EUR 132 million. The exact use of these proceeds depends on the negotiations with the different stakeholders of Swan (i.e. creditors, lenders, etc.). Based on the current situation, the proceeds of the sales will not allow Swan to meet all its liabilities in full. A best estimate of the total liabilities of Swan per 31 December 2011 amounts to about EUR 136.5 million plus contingencies. The management of Swan will use its reasonable endeavours to come to a settlement that is acceptable to all its stakeholders, in line with applicable law.
The future of Swan will depend on the outcome of the negotiations with the purchasers of the Saab Auto Group (Pang Da and Youngman) and the Spyker business (North Street). If Swan is not able to complete a sale of the Saab Auto Group or secure further financing for the Saab Auto Group, management will likely not be able to safeguard the continuity of the Saab Auto Group, which will have negative financial implications for Swan and its stakeholders and may result in the bankruptcy of the Saab Auto Group.
If Swan is not able to complete a sale of the Spyker business, Swan may continue the Spyker business, provided that the necessary funding for that business can be obtained. If Swan were to sell the Saab Auto Group but continues the activities of the Spyker business, as it did before it acquired the Saab Auto Group at the beginning of 2010, it will focus exclusively on the Spyker business. If both businesses are sold, Swan will consider all of its options (including a voluntary liquidation of Swan).
The fact that the required approvals are not yet secured and that there are currently not yet final binding agreements in place with the purchasers of the Saab Auto Group and the Spyker business leads to uncertainty with respect to the completion of the various transactions described above and thus the future of Swan and any settlement with stakeholders.

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Swedish Automobile N.V.: INFORMATION ON EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
Zeewolde, The Netherlands, 11 November 2011 – Swedish Automobile N.V. (Swan) provides further information regarding the sale of the Saab Auto Group and the Spyker business, including the further consequences for Swan.
1. Sale of the Saab Auto Group

On 28 October 2011, Swan entered into a memorandum of understanding (the MOU) with Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman) and Pang Da Automobile Trade Co., Ltd. (Pang Da) for the sale by Swan to Youngman and Pang Da of the shares that Swan holds in Saab Automobile AB (Saab Automobile) and Saab Great Britain Limited (Saab GB) for an aggregate purchase price of EUR 100 million. In terms of the MOU, the total purchase price of EUR 100 million will be paid in the following manner:
EUR 50 million upon completion of the sale

The agreement in principle is that any outstanding intragroup loans and other financial obligations between Swan, on one hand, and Saab Automobile, its subsidiaries and Saab GB (together Saab Auto Group), on the other, will be set off or written off in accordance with applicable law without any actual payment being due and payable. The draft SPA will also be based on the principle that Swan is to be discharged of all Saab-related obligations.

The MOU is valid until November 15, 2011; its validity is also contingent on Saab Automobile remaining in reorganisation. The parties are currently in discussion about the SPA. GM publicly indicated on 7 November last that it will not agree to the continuation of the existing technology licenses or the continued supply of 9-4X vehicles to Saab Automobile following the proposed change in ownership of the Saab Auto Group. Swan and Saab Automobile are currently in discussion with GM. Without the GM consent having first been obtained, it is uncertain whether the parties are in the position to sign an SPA before 15 November of this year.

An important consideration for Swan to enter into the transaction is the commitment of Pang Da and Youngman to provide long term funding to the Saab Auto Group. With Youngman and Pang Da as new partners, the basis for a successful re-start of the Saab Auto Group would be established.

Pang Da and Youngman have assured Swan that their investment in the Saab Auto Group is driven by a business rationale that includes a long-term strategy for the group.
2. Sale of the Spyker business

Swan announced on 29 September 2011 that it had reached conditional agreement with North Street Capital, LP (North Street), a US based private equity firm, to sell to North Street the Spyker sportscar business for a purchase price of approximately EUR 32 million.

Swan is currently in discussions with North Street about the sale of the Spyker business and definitive transaction documentation.
3. Consequences for Swan of the sale of Saab Auto Group and Spyker business

3.1 Use of sale proceeds

If Swan sells the Saab Auto Group and the Spyker business as currently envisaged, the total (net cash) proceeds will amount to EUR 132 million. The exact use of these proceeds depends on the negotiations with the different stakeholders of Swan (i.e. creditors, lenders, etc.). Based on the current situation, the proceeds of the sales will not allow Swan to meet all its liabilities in full. The management of Swan will use its reasonable endeavours to come to a settlement that is acceptable to all its stakeholders, in line with applicable law.

3.2 Future of Swan

The future of Swan will depend on the outcome of the negotiations with the purchasers of the Saab Auto Group (Pang Da and Youngman) and the Spyker business (North Street).

If Swan is not able to complete a sale of the Saab Auto Group or secure further financing for the Saab Auto Group, management will likely not be able to safeguard the continuity of the Saab Auto Group, which will have negative financial implications for Swan and its stakeholders and may result in the bankruptcy of the Saab Group.

If Swan is not able to complete a sale of the Spyker business, Swan may continue the Spyker business, provided that the necessary funding for that business can be obtained.

If Swan were to sell the Saab Group but continues the activities of the Spyker business, as it did before it acquired the Saab Auto Group at the beginning of 2010, it will focus exclusively on the Spyker business.

If both businesses are sold, Swan will consider all of its options (including a voluntary liquidation of Swan).

The fact that the required approvals are not yet secured and that there are currently not yet final binding agreements in place with the purchasers of the Saab Auto Group and the Spyker business leads to uncertainty with respect to the completion of the various transactions described above and thus the future of Swan and any settlement with stakeholders.
Below a best estimate overview of the liabilities of Swan per 31 December 2011 (unaudited):

Most important creditors (amounts in million EUR):
Tenaci Capital B.V…………….2.5 (loan including interest)
Gemini Investment Fund……..30.5 (convertible loan including interest)
Epcote S.A…………………….23 (convertible loan including interest)
Trade creditors………………. 8
Completion costs……………. 2.5 (advisory and redundancy costs)
Other…………………………..p.m. (contingencies)
Total………………………….. 136.5

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Swedish Automobile N.V.: UPDATE ON PROPOSED SALE OF SAAB AUTOMOBILE AND SAAB GB
Zeewolde, The Netherlands, 7 November 2011 – Swedish Automobile N.V. (Swan) and Saab Automobile AB (Saab Automobile announce they have taken notice of a press statement issued by General Motors Company (General Motors) today regarding the proposed sale of all shares in Saab Automobile and Saab Great Britain Ltd. (Saab GB) to Pang Da Automobile Trade Company Ltd (“Pang Da”) and Youngman Automotive Group Company Ltd (“Youngman”).
Swan and Saab Automobile acknowledge the position taken by General Motors and will now discuss with Pang Da and Youngman to see whether a structure can be agreed which is acceptable to all parties concerned.
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Swedish Automobile N.V.: DISTRICT COURT APPROVED CONTINUATION VOLUNTARY REORGANISATION

Zeewolde, The Netherlands, 31 October 2011 – Swedish Automobile N.V. (Swan) announces that the District Court in Vänersborg approved the continuation of the voluntary reorganization for Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB following the creditors meeting of this morning.
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Swedish Automobile N.V. : INFORMATION ON RESTRUCTURING PLAN SAAB AUTOMOBILE

Zeewolde, The Netherlands, 31 October 2011 – Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (together Saab Automobile) today present their preliminary reorganization plan to their creditors during a creditors’ meeting in Vänersborg, Sweden.

The preliminary reorganization plan, which was developed by Saab Automobile management and supported by the current and foreseen owners of Saab Automobile as well as its administrator of the reorganization, contains the following highlights:
Pending the approval from all relevant parties, short- and long-term funding for Saab Automobile is assured: Youngman and Pang Da have expressed their commitment to provide EUR 50 million, to fund Saab Automobile while in reorganization. In addition, the Chinese investors will provide a minimum of EUR 600 million in funding to restart production, to settle the company’s clear and due debts and to fund operations for the 2012-2013 medium-term timeframe. To provide funding for the revised business plan and provide long-term financial stability the new Chinese owners have also budgeted funding for the planned expansion of Saab Automobile’s portfolio and additional operations to be set up in China. Saab Automobile has not received the funds from Pang Da and Youngman that have been committed for today.
New strategy and structure to combine the strength of Pang Da, Youngman and Saab Automobile, with Saab Automobile’s brand equity and heritage, product portfolio and capabilities being the key elements of that partnership combined with the distribution capabilities of Pang Da in China and the manufacturing expertise of Youngman.
Key actions during reorganization: establish new ownership structure with Pang Da and Youngman as strategic partners; reach agreement with creditors on repayment of outstanding debt to restore Saab Automobile’s supply chain; reduce structural costs by SEK1 billion, among others through reducing headcount by 500 employees; and generally restore confidence and trust with all key stakeholders
Restart plan highlights include: seamless production restart supported by existing order bank; accelerate access to China as major growth market; new distributorship agreements in other emerging markets like Russia, new products for traditional key markets (65% of volume) and China which include the 9-5 SportCombi and the 9-4X.
Confirmation of the long-term strategy of repositioning Saab as a distinctive, near premium brand supported by a renewed and broadened product portfolio, a more flexible cost structure with global production footprint, cross-carline modular technology architecture generating synergies, provision of external engineering services and expanded operations to take advantage of growth opportunities available in China and provided by strong Chinese owners.
Sales targets for 2012 of 35-55,000 cars and 2013 of 75-85,000 cars based on realistic ramp up in line with sales development since last restart.
Long term volume outlook of 185-205,000 cars of Saab Automobile based on three main growth drivers: 1) broadened product portfolio in fast growing market segments; 2) capitalizing on access to Chinese market, and; 3) strong profitability focus.
2012 and 2013 seen as financial transition years, profitability expected no later than 2014. Long term margins and profitability in line with other near premium car manufacturers.
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SWEDISH AUTOMOBILE ISSUES SUBSCRIPTION NOTICE UNDER GEM FACILITY

Zeewolde, The Netherlands, 28 October 2011 – Swedish Automobile N.V. (Swan) announces that it issued a subscription notice for 3 million shares under the current EUR 150 million equity facility between Swan and GEM Global Yield Fund Limited. The exact number of shares to be issued and the price thereof will depend on the pricing period which commences today.
In light of recent developments, North Street Capital, LP will not subscribe for 2.3 million shares in Swan and revoked its commitment to provide a loan of USD 60 million to Saab Automobile.
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SWEDISH AUTOMOBILE SIGNS MOU WITH PANG DA AND YOUNGMAN FOR THE SALE OF SAAB AUTOMOBILE AND SAAB GB

Zeewolde, The Netherlands, 28 October 2011 – Swedish Automobile N.V. (Swan) announces that it entered into a memorandum of understanding with Pang Da and Youngman for the sale and purchase of 100% of the shares of Saab Automobile AB (Saab Automobile) and Saab Great Britain Ltd. (Saab GB) for a consideration of EUR 100 million.

Final agreement between the parties is subject to a definitive share purchase agreement between Swan, Pang Da and Youngman, which will contain certain conditions including the approval of the relevant authorities, Swan’s shareholders and certain other parties. The consideration of EUR 100 million will be paid in instalments. An important consideration for Swan to enter into the transaction is the commitment of Pang Da and Youngman to provide long term funding to Saab Automobile.

The administrator in Saab Automobile’s voluntary reorganisation, Mr. Guy Lofalk, has withdrawn his application to exit reorganisation. The MOU is valid until November 15 of this year, provided Saab Automobile stays in reorganisation.
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TRADING UPDATE SWEDISH AUTOMOBILE N.V. (including SAAB AUTOMOBILE AB) THIRD QUARTER 2011
Zeewolde, the Netherlands, 18 November 2011 – Swedish Automobile N.V. (Swan), a holding company that owns subsidiaries which produce and sell premium automobiles under the Saab and Spyker brands (together referred to as the “Group”), today issues a trading update for the third quarter of 2011 ended 30 September 2011. The Group is listed on NYSE Euronext Amsterdam (ticker symbol SWAN).
KEY DEVELOPMENTS
Saab Automobile AB, Saab Automobile Powertrain AB and Saab Automobile Tools AB (together Saab Automobile) entered voluntary reorganization under Swedish law

Conditional agreement reached on sale of Spyker Automotive business to North Street Capital, LP with net proceeds for Swan of EUR 32 million

Efficiency improvement initiative launched as part of voluntary reorganization process, in order to create more flexible and competitive cost structure

Finalizing voluntary reorganization process, implementing revised business plan and restarting sustainable production top priorities for Saab Automobile management

SPYKER CARS N.V. including SAAB AUTOMOBILE AB REPORTS ITS FULL YEAR RESULTS 2010
Zeewolde, the Netherlands, 25 March 2011
Saab Automobile has made significant progress during 2010 towards profitability by 2012 in accordance with its business plan
Spyker Cars N.V., a holding company that owns subsidiaries which produce and sell premium automobiles under the Saab and Spyker brands (together referred to as “the Group”, or “Group”), today announces its results for the full year 2010 ended 31 December 2010. The Group is listed on NYSE Euronext Amsterdam (ticker symbol SPYKR). The figures disclosed in this press release are unaudited.
Financial Highlights 2010
Full-year sales of € 819 million, Q4 sales of € 301 million[1]

EBIT of € (140) million in 2010[1]

Gain from bargain purchase of € 78 million resulting from acquisition Saab Automobile AB (‘Saab Automobile’) and Saab Great Britain Ltd

Result from discontinued operations of € (60) million includes the losses of the Spyker Automotive business and the effects of the planned sale to CPP Global Holding Ltd

Cash generated from operations amounts to € (115) million for 2010[1]

Corporate and Operational Highlights 2010
Sales continue to build momentum in several major markets (Sweden, US, UK) as independent Saab distribution network was re-established

31,696 cars sold (wholesale[2]) in 2010 compared to 27,482 in 2009, an increase of 15%

11,448 cars sold (wholesale[2]) in Q4 2010, up 129% compared to Q4 2009 and up 31% compared to Q3 2010

32,048[2] cars produced in 2010, compared to 20,905 in 2009, an increase of 53%

Restart of production in Trollhättan with over 800 suppliers after seven weeks of total stand-still

Production of 9-3 Convertible and 9-5 Sedan relocated to Trollhättan

Concentration of all operational activities in Trollhättan, enabling more efficient operations and reduced costs

Wholesale and retail financing agreements secured with major global financial players such as Banco Cetelem, Santander Consumer Bank and GMAC

Key management appointments in several areas

Successful global launch of the new Saab 9-5, with positive response from media and consumers alike

Successful unveiling of the Saab 9-4X, Saab Automobile’s first ever cross-over vehicle-with equally positive response

Introduction of new diesel engines program delivering class-leading low CO2 values for the 9-3 range

Agreement with BMW for supply of gasoline engines for new 9-3, to be launched in Q4 2012

Launch of partnership with American Axle Manufacturing (AAM) for development and marketing of Saab-developed electric all-wheel drive system

Launch of the e-Power electric vehicle program in cooperation with external partners

Establishment of a global, Saab-controlled sales network covering 51 countries and the launch of Direct Dealer concept for 9 European countries

Sales network continued to expand with new importers in Portugal and Japan, re-establishing sales network in Canada and Australia and principle import agreement for the Chinese market
[1] Saab Automobile AB is consolidated from 23 February 2010, Saab Great Britain Ltd. is consolidated from 31 May 2010. Sales exclude discontinued operations (i.e. Spyker Automotive business).
[2] Saab Automobile AB on full year basis.

Victor R. Muller, CEO of the Group and Chairman of Saab Automobile, said: “In 2010, Saab firmly established itself as an independent car manufacturer. The company made significant progress since we acquired the business. We have forged important strategic relationships and established a Saab-controlled global sales organisation, laying the foundation for an independent and profitable global premium auto brand. The achievements in 2010 reflect the tremendous tenacity shown by all our employees and dealers in what has been an incredibly eventful year for Saab. Last year we started to crawl, this year we learn to walk and as of next year, we will be up and running.”

“Saab has made much progress in the past year, in what I would like to describe as the first of our build-up years. 2011 will be another build-up year, before we will see the result of our hard work by achieving profitability in 2012.” said Jan Åke Jonsson, President & CEO of Saab. “We are confident that the strong sales momentum as witnessed in the third and fourth quarter of 2010 will continue to build throughout 2011, as Saab continues to strengthen its product portfolio. We are on track with our product development and this year, we will bring four new products to the market, including the Saab 9-4X as from May 2011, which gives Saab Automobile access to the growing cross-over segment, and the much-awaited Saab 9-5 SportCombi. In addition, we will launch the successor to the current Saab 9-3 in 2012, so that in 2 years from now all Saab models will be younger than 2 years.”
Saab Automobile Operational Review
Production & sales

On 23 February 2010 Saab Automobile effectively exited liquidation with no cars in production, no material in order, very low global inventory, several product development projects on hold and limited marketing activities. In the direct period following this date, management focused on restarting operations and regaining the trust of dealers, customers and suppliers. Manufacturing was restarted on 22 March, 2010 after a complete 7 week standstill. After resolving persistent parts shortages, capacity and output steadily increased. While Saab Automobile manufacturing was fully operational by this time, the company was still hampered by the disruption of the supply chain as a result of the liquidation phase.

Full-year production in 2010 came in at 32,048 units, an increase of 53% compared to the 20,905 units produced in 2009. Given the effective shut down in Saab Automobile’s operations during the first months of 2010, the year 2010 should not be seen as representative in terms of volumes, but as a necessary episode from which Saab Automobile will build going forward.

Following the acquisition of Saab Automobile on 23 February 2010, the Group undertook a massive effort not only to restart production, but also to establish a global, Saab-controlled independent distribution network. In addition to the acquired Saab-owned distribution networks in Saab Automobile’s largest markets (the US, the UK and Sweden), Saab Automobile successfully established its own controlled network in other key markets in and outside Europe. Wholesale and retail financing was secured through agreements with GMAC, Santander Consumer Bank and Banco Cetelem, enabling Saab Automobile to finance its own and dealers’ stock and offer retail financing programs to end users. A complete carve-out of Saab Automobile’s distribution network from General Motors was realized by 1 July 2010, two months earlier than anticipated.

One of the largest challenges in 2010 was to restock dealers around the world to normal levels again. This was especially vital in markets like the United States, where dealer stock is key in order to be able to sell cars. When the Group acquired Saab Automobile in February 2010, there were a mere 500 cars left on the ground in the United States, while normal inventory levels in this market are substantially higher. Moreover, as production was considerably lower than sales in 2009, inventory levels around the globe were depleted by almost 19,000 units.

Saab Automobile also expanded its distribution network, by signing up new partners and re-launching the Saab Automobile brand in a number of markets. On 2 August, Saab Automobile announced an importer agreement with Tokyo-based PCI Co. Ltd. for the Japanese market. On 31 August, the appointment of Lisbon-based Hipogest Group as an importer for the Portuguese market was made public. The Saab brand was re-launched in the Canadian market in the Autumn of 2010, while Saab Automobile also announced plans for a re-launch of the brand in the Australian market as of early 2011. At the end of 2010, Saab Automobile announced a principle agreement with CATC for the import of cars for the Chinese market. Also with CATC, Spyker concluded a joint venture agreement for the marketing and sale of Spyker super sports cars in mainland China. At the end of 2010, Saab Automobile vehicles were sold in 40 reporting markets, covering 51 countries, through a network of around 900 dealerships.

Sales development was heavily influenced by events in the beginning of 2010, as Saab Automobile emerged from liquidation and restarted production at the end of March after a seven-week standstill. However, as the year proceeded, Saab Automobile continued to see sales momentum increase quarter by quarter in several key markets, with an especially strong performance in the fourth quarter. Full-year wholesale (revenue generating volume) increased 15% year-on-year to 31,696 cars, on the back of encouraging results in several key markets. Full-year retail sales amounted to 28,284 cars, down 29% year-on-year.
Product development

During 2010 all efforts were directed at finalizing the Saab 9-4X and the Saab 9-5 SportCombi and initiating the development of the new Saab modular vehicle architecture called “Phoenix” and the first vehicle to use this new architecture, the next generation Saab 9-3. Also, during the Mondiale de l’Automobile in Paris, Saab Automobile revealed a range of new TTiD turbo diesel engines for the existing 9-3 SportSedan, including a 180 hp variant with class-leading 119 g/km CO2 emissions, making the 9-3 SportSedan a very attractive fleet offer in several European markets.

In Paris, the Saab e-Power concept car was revealed, the first fully electric Saab. The e-Power is based on the Saab 9-3 SportCombi and an initial test fleet of 50 prototypes was announced to test the viability and business model of electric vehicles. This test fleet is expected to become operational in the summer of 2011. The Saab e-Power is the result of a co-operation between Saab Automobile, Boston Power (an American lithium-ion battery firm) and other external partners.

The Saab 9-4X crossover was launched at the Los Angeles Motor Show in November and represents an entry into a new segment for Saab Automobile. The crossover segment is a growing segment globally and the Saab 9-4X will attract new and existing customers to the Saab brand. Production launch of the Saab 9-4X will start in April 2011 for USA and Canada, while the global roll-out will continue in the autumn of 2011. The Saab 9-4X is manufactured at a General Motors facility in Ramos Arizpe, Mexico.

Development of the new Saab modular vehicle architecture Phoenix has progressed during 2010. This new architecture will create the base for many future Saab products and features several advanced technologies. The architecture will for instance include the e-AWD system, a Saab Automobile invention that is being commercialized in a joint venture with AAM.

Since its split from General Motors on 23 February 2010, Saab Automobile has worked intensively to revitalize its engineering department which until then was integrated in the General Motors structure. All employees within the department are now primarily focused on Saab Automobile projects, unlike under the GM era. The new engineering organization is now well-equipped to support Saab Automobile’s extensive development program and current product offensive, while it will optimize Saab Automobile’s ability to build competitive premium cars for the 21st century and allow the company to realize its ambition of creating one of the most efficient engineering organizations in the automotive industry.

Complementing development activities in Saab Automobile’s own engineering department, Saab Automobile continues to benefit from the technology resources of General Motors and from (future) co-operations with other OEMs and other companies in the automotive industry. This fresh approach within Engineering is reflected in several strategic technology partnerships with parties such as BMW, Boston Power, AAM and VICURA, while Saab Automobile is also sharing its engineering know-how with third parties through its business unit Saab Engineering Services.
Group – Summary Income Statement
The 2010 financials of the Group reflects the start-up and the restructuring process of turning Saab Automobile into a successful independent company.
The 2010 sales were lower than business plan due to the time between pick up from shut down mode at the acquisition date to normal production where Saab Automobile is now. Not only did the complete production facility have to be restarted, the sales channel needed to be reactivated after a stand still of months. This also impacted the margin negatively compared to business plan.

Due to the focus on cost control the operating expenses were significantly lower than anticipated.

The Net Results amounts to € (218) million.

The financial result of € (17) million mainly consists of interest expenses on interest bearing borrowings (€ 40 million) and foreign exchange gains (€ 27 million).

Result from discontinued operations of € 60 million includes the losses of Spyker Automotive business and the effects of the planned sale to CPP Global Holding Ltd
Purchase Price Allocation.
The Group has finalized the Purchase Price Allocation (“PPA”) on the value of the Saab Automobile net assets it acquired in excess of the $74 million (€ 54.4 million) purchase price paid to General Motors. After finalizing management concluded, in line with the earlier expectations, that the fair value of the net identifiable assets and liabilities of the acquired business combination exceeded the total purchase consideration of € 54.4 million by an amount of € 77.9 million. IFRS requires that the Group recognizes the resulting gain as a profit on closing. The gain has no impact on the company’s cash position as it is a non-cash item.
Shareholders Equity
The 2010 Group balance sheet includes the acquired Saab Automobile AB and Saab Great Britain Ltd entities. It reflects the effect of financing these acquisitions and the operating loss incurred up to the end of 2010, largely due to the restarting of Saab Automobile’s manufacturing operations.

Under IFRS regulations the Group is required to classify the $ 326 million RPSs issued by Saab Automobile to General Motors as liabilities instead of equity. This requirement is one of the main reasons that a negative equity position is disclosed at Group level under IFRS. On the contrary, Saab Automobile has a positive equity position under Swedish GAAP, where the RPSs qualify as equity. Saab Automobile’s equity amounts to SEK 1,935 million (€ 215 million) as per 31 December 2010.

The negative equity position of the Group under IFRS has no direct impact on the execution of the Saab Automobile business plan, nor does it imply that the Group is legally required to issue new shares in its capital.
Working capital
The Group’s net working capital at the end of 2010 was € (220.1) million. The Group aims for adequate management of working capital. As part of the improvement of the liquidity, Management is actively pursuing debt collection, negotiating improved terms and conditions with suppliers, improving logistics chains and aiming at strict inventory control.
Funding
The EIB provided a € 400 million loan to Saab Automobile for development purposes, guaranteed by the Swedish National Debt Office. At year end 2010, € 183 million was drawn under this facility, leaving € 217 million as undrawn facility. In January 2011 an amount of € 32 million was drawn from EIB, leaving € 185 million as un-drawn today.

The Group obtained a € 74 million loan with a five year maturity from Tenaci Capital B.V.(‘Tenaci’), which was partially used for the acquisition of Saab Automobile. Additionally, an € 18 million convertible loan with a two year maturity was provided by an investment company Epcote S.A., solely to fund the acquisition of Saab Automobile.

As a result of the anticipated disposal of the Spyker Automotive business (see also below) the loans provided by Tenaci will be reduced, further lowering the interest costs for the Group. More specific details shall be disclosed after completion of the transaction, which is expected shortly.

Of the € 150 million GEM Equity Standby Facility € 1.8 million was drawn in the first six months of 2010. The Group did not draw any funds under this facility in the second half of 2010.

Due to less available cash at year-end 2010 than anticipated because of lower sales volumes (to the extent that these were not fully off-set by cost reductions and working capital improvements), heavy investments in product launches and future product development, the Group’s cash position is monitored very closely by Management. To strengthen working capital in the short term, Management is raising liquidity from current shareholders and other available sources. To ensure adequate liquidity for the remainder of this year and to further improve its capital structure, Management is currently pursuing various options to improve the Group’s funding, accelerate the execution of its business plan and strengthen the Group’s balance sheet going forward, also from a more strategic perspective.

Further details of the consolidated financial figures are set out in the Annual Accounts 2010, to be issued on 31 March 2011.
Near Term Management Priorities
Management will continue to focus on its strategy in making Saab Automobile a profitable, independent niche premium car manufacturer, while reducing risks in the execution of the plan. Its key priorities in this respect are to:
Continue product development activities in order to refresh and expand the entire product portfolio

Continue to build up an independent Saab distribution organization

Continue to build up capabilities as an independent company

Manage cash and control costs and capital expenditure tightly

Continue to focus on initiatives to further reduce the break-even point
In summary: all measures to continue to restore confidence with dealers, suppliers, customers and other stakeholders in order to support increasing sales

In addition to driving the ongoing business operations, Management will continue the execution of its business plan. Saab Automobile will continue to enhance its unique and strong brand, relying on its heritage of innovation, aircraft inspiration and Scandinavian values. In line with the objective to shorten product lifecycles and broadening of its portfolio, in 2011 alone four new models will be launched into markets around the globe, among which the 9-5 SportCombi and the new Saab 9-4X (Saab’s first ever cross-over).

Management’s focus remains on the strategic positioning of Saab as a premium brand and to improve sales prices and higher profit margins through a rejuvenated product portfolio.
Recent events
A major recent event was the global premiere of the Saab 9-5 SportCombi during the Salon International de l’Automobile in Geneva, Switzerland. The addition of the SportCombi considerably broadens the potential of the 9-5 range in several markets around the globe. Production of the 9-5 SportCombi will start in July 2011. In Geneva, Saab Automobile also officially launched the Saab 9-3 Griffin range and the special Independence Day edition of the Saab 9-3 Convertible, celebrating one year of independence for the company. The 9-3 Griffin range will be equipped with a new turbocharged SIDI engine that will further increase performance and reduce fuel consumption, while the 9-3 SportCombi TTiD now also emits only 119g CO2/km, making it a very attractive fleet offer in several European markets.

At the Geneva event, Saab Automobile also showed the Saab PhoeniX concept car to the public for the first time. Designed by Saab Automobile’s design chief Jason Castriota, the car gives a clear indication of Saab Automobile’s design language for future models such as the successor to the current Saab 9-3, which will be launched in Q4 2012. In addition the Saab PhoeniX concept showcased a revolutionary infotainment system that pioneers open source innovation in cars, called IQon. This Android-based system is open to third-party service providers and application developers, allowing Saab drivers to upgrade and download applications and fully personalize their car’s infotainment system. Also, e-AWD was featured in this concept vehicle, a Saab-innovated system that brings the benefits of traditional AWD but with greater fuel efficiency.

The restructuring of Saab Automobile on the road to successful independence continued during the first months of 2011, as the company announced new structures for both its engineering department and the sales organization. Engineering has become a revitalized, more efficient and independent organization following the split from General Motors, and is now well-equipped to support Saab Automobile’s extensive development program and product offensive.

The sales structure was changed by introducing five regions, each led by a regional director based in Trollhättan and responsible for market development, sales and aftersales. The regions identified in the new structure are: Americas, Nordic, Europe, Asia Pacific, Middle East & Africa. The regional directors all report directly to the Vice President for Global Sales and Aftersales. This new structure gives individual markets a direct link with company headquarters through their regional organizations, creating shorter lines of communication and a more effective decision-making process.

On 5 January 2011, it was announced that Mr. Rob Schuijt strengthens the management team of the Group as Senior Vice President Corporate Development. His appointment to the Management Board of the Group will be proposed at the General Shareholders Meeting on 19 May 2011.

The Group announced on 24 February 2011 that it had signed a memorandum of understanding to sell the assets of the Spyker Automotive business to the private UK holding CPP Global Holdings Limited. This company is owned by Vladimir Antonov, a former investor and majority shareholder of the Group. Indicative terms include a purchase price of € 15 million plus a € 17 million earn-out. Within 6 months of completion of the sale and subject to certain conditions, it is envisaged that Tenaci shall convert € 7.5 million of its loans to the Group at € 5.50 per share whilst it is converting its € 9.5 million convertible loan at € 3.75 per share effective today

The potential sale would be structured as an asset purchase of virtually all assets related to the Spyker Automotive business. This transaction would allow the Group to focus on its Saab Automotive business while reducing debt and improving results through reduced interest expenses and removing the operating losses related to the Spyker Automotive business. The Group intends to change its name shortly.

Whereas Saab Automobile has not yet seen any serious negative effects in its business from the catastrophe in Japan, Management continues to monitor the situation as well as work on possible back-up plans, in order to reduce the risk exposure caused by possible disruptions in its parts supply chain.

On 18 March 2011, Saab Automobile announced an innovative supply agreement with ZF Chassis Systems, a leading international supplier of driveline and chassis systems. Under the agreement, ZF will set up a sub-assembly plant close to the Saab Automobile factory for the supply of advanced front sub-frames and complete rear axles for installation in the next generation of Saab cars.
Pieter Heerema elected to step down as Supervisory Board member of Spyker Cars N.V. per 21 March 2011.

Today, 25 March 2011, Saab Automobile announced the formal signing of an agreement with China Automobile Trading Co. Ltd (‘CATC’) regarding the import of Saab vehicles and spare parts for the Chinese market. The contract is the formalization of the memorandum of understanding (MOU) with CATC, which was signed and publicly announced in December 2010.

Also today, Saab Automobile announced the appointment of a new importer and distributor for the highly important Russian market. Effective immediately, Moscow-based Armand Import will take over all marketing, sales and distribution responsibilities from GM CIS. Official sales are expected to start mid-2011.

Today,Jan Åke Jonsson, President and CEO of Saab Automobile AB, announced his retirement effective as of the Group’s Annual General Shareholders meeting to be held on 19 May 2011. A search for a successor to Jan Åke Jonsson has already been initiated and he agreed to assist Saab Automobile’s Management with a smooth transition to his successor. He will remain available as such until 1 September 2011. Until a successor to Jan Åke Jonsson is appointed, Victor Muller will temporarily assume the role of President and CEO of Saab Automobile in addition to his role as Chairman of Saab Automobile’s Board.
Outlook
Given the increasing sales momentum in 2010 and the planned re-entry of markets such as Russia and China, Management remains confident that this momentum will continue to build throughout 2011 and 2012. However, 2011 and 2012 are build-up years for Saab Automobile and although volume and markets share are important, Management’s key objective is to renew and expand the product portfolio, enhance the distribution organization and build an independent company, while remaining within the financial boundaries set in its business plan. The Group’s medium term goal is to establish Saab Automobile as an independent, financially viable, niche premium car manufacturer. The Group also foresees a net loss for 2011, after which profitability is scheduled for 2012.

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