14 of 64

**update 10 December 14:05 CET**
Despite the flurry of (mostly positive) news bits from the past week or so, the Vänersborg District Court still hasn’t taken a decision on whether or not the reorganisation phase can continue as NEVS requested on December 1st. The decision is expected on Thursday 11 December and the key lies not only in whether the court recons that there is a viable approach forward, but also whether there is an agreement with the creditors.  So far, 14 of 64 creditors have confirmed their position to the court and they aren’t all positive.

NEVS  ©2014 saabblog.net
NEVS ©2014 saabblog.net

Mahindra saves the day
The actual application for extension of the reorganisation was filed a week ago on Monday. It more or less reads as a summary of the original reorganisation plan (i.e. with still „Plan A“ and „Plan B“ as options mentioned), with two main differences. The first and key one that has drawn most media attention already: on Sunday 30 November a Letter Of Intent (LOI) was signed by „a major OEM player“ for an upcoming direct investment in NEVS. This OEM -now through one of the suppliers formally confirmed as Mahindra– is to become majority owner and will ensure the completion of NEVS‘ business plan and continued in-house car production in Trollhättan. If anything, this confirmation of the signed LOI was the critical missing bit to prevent the court from declining the extension request immediately, so I suppose Mahindra saved the day.

Trust
As reported earlier, suppliers were requested by Administrator Lars-Eric Gustafsson to write down up to 50% of their outstanding claims with NEVS. The other difference from December 1st was that contrary to what was written in the letters from the week before, Gustafsson now says that „creditors with a claim below a certain amount are paid in full, and that creditors with claims in excess of such amount receive payment of a certain percentage on the excessed amount“.  So more individual suppliers likely to be in agreement, while the ones with the larger claims are the harder nuts to crack, in particular as NEVS essentially says that there is no actual detailed proposal yet (i.e. no set thresholds or percentages). Either way, trust in NEVS is being severely compromised as promises of „full payments“ are now likely being broken.

LeanNova against?
So the creditors are asked to agree just in principle so that the court will approve the prolongation of the reorganisation and as soon as they say yes (technically, creditors holding 60%+ of the total claim amount have to back it), the actual negotiations can take place.
So far, 14 of the 64 creditors have confirmed their position to the court. While some have specific reservations (e.g. concerns about the rights to continue to use the SAAB brand name, but also criticism against the requested write down of the claims and the associated perceived violation of trust), they are predominantly positive.  Earlier reports also confirmed that the creditors committee consisting of representatives from the Swedish tax office, Leannova Engineering, Orio, Hewlett Packard, Plastal and labor unions IF Metall and Unionen was positive. Interestingly, LeanNova (one of the largest creditors with a claim of over SEK 100M) now wrote to the court that they are against the proposed settlement where they would be forced to write off a part of their claim. Whether this means they are also against the extension of the reorganisation is as such is unlikely.

And Svea Ekonomi really doesn’t want to play
On Wednesday morning the news broke that credit, financing and collections company Svea Ekonomi is in fact against a prolonged reorganisation under the current conditions. In the letter they sent to the Vänersborg court they state that they have insufficient belief in NEVS‘ proposed financing as long as there is no legally binding contract where a new investor (read: Mahindra) is taking over the accountability for running the business.

Decision time Thursday?
The deadline for the creditors to report back to the court was on the 9th and I’m expecting a decision latest by the end of the week as the three judges responsible for the case are convening on Wednesday. The fact that Svea Ekonomi (with claims of around SEK 33M) has now expressed their disapproval means that the court needs to take more time to come to a conclusion.
However, assuming the extension is granted (and much is pointing in that direction), a great deal of work still needs to be done. If anything, to indeed get the Letter of Intent turned into a legally binding contract. Supposedly, the Mahindra board will take such a decision by the end of this month but this may need to be sooner…

15 Gedanken zu „14 of 64

  • Wenn das Ganze effektiv über die Bühne gehen soll, und ein Käufer die Produktion in Trollhattan wieder aufnehmen will, dann führt kein Weg daran vorbei, alle Lieferanten / Gläubiger von NEVS vollumfänglich zu entschädigen. Die gegenwärtig eingeschlagene Strategie von NEVS mit Gläubigerverzicht ist kurzsichtig und gibt kein Vertrauen in die Zukunft. Mahindra als Käufer sollte sich schleunigst vom Kosten-Sparen/Erbsen-Zählen verabschieden und entweder ernsthaft einsteigen oder es sein lassen. Als Lieferant würde ich mir zwei Mal überlegen, ob ich die Nachfolgegesellschaft wieder beliefern soll. Es genügt, wenn dies ein Paar Lieferanten nicht wollen, und alle Pläne sind verzögert oder dahin.

  • The only positive however is that when NEVS is not getting the additional 3 months to reorganize; bankruptcy is inevitable and every supplier will loose.
    But the situation is very difficult; too much „if’s“.
    One this is sure; this should really be the last chance and if this one fails it is over for ever.

  • Kein Gläubiger verzichtet freiwillig auf Forderungen – es ist eher eine Gläubiger-Erpressung. Gläubiger können nun darüber spekulieren, ob der Verlust via Verzicht oder via Konkurs kleiner ist. Es kann sich jeder selber überlegen, wie glaubwürdig die Papiere von NEVS unter diesen Voraussetzungen sind. Vor kurzer Zeit stand darin noch, dass sämtliche Verbindlichkeiten zu 100% bedient werden. Jetzt eiert man rum und steht nicht zum abgegebenen Wort.

    Mit einer solchen Firma würde / werde ich keine Geschäfte mehr machen – weder als Kunde noch als Lieferant. Ohne funktionierende lojale Lieferkette dahinter sind auch die besten Produkte nichts wert. Die bisherigen SAAB-Fahrer haben bereits eine jahrelange Odyssee hinter sich. Ob diese Fahrer eines Nischen-Produktes je wieder zurückkommen hängt nicht nur von den verfügbaren Produkten ab sondern hochgradig vom Vertrauen in die Firma, die dahintersteht.

    Ich bin auch der Meinung, dass NEVS und ein potentieller Bieter sich auf diese Weise ein weiteres Mal unnötig das letzte Vertrauen verspekulieren.

    Ob M+M mehr kann und will, als farbige Schoko-Böhnchen zu produzieren, werden wir sehen. Zur Zeit sieht es nicht nach mehr aus. Hier ist ein klares Commitment notwendig. Andernfalls soll man es sein lassen. So wie man es jetzt probiert, wird man kaum die nötige Markt-Akzeptanz finden.

    Ich sehe darüber hinaus keinen Grund, einem Bieter, der auf einem solch belasteten Trümmerhaufen neu anfangen will, den Markennamen SAAB zur Verfügung zu stellen.

    • Sie haben alles gut zusammengefasst und es ist indertat so.
      Frage ich mich nur jetzt ab wer die notwendige Ersatzteile produzieren wird wen NEVS nicht mehr weiter prodiuziert?
      Weis jemandem wer die Ersatztielen her kommen die wir Allen brauchen und bekommen?

      • Good question and I would imagine that a possible NEVS bankruptcy will directly threaten the availability of certain spare parts (specifically body parts). As I understand it, Orio is well stocked for the short term but there could be an issue in the mid-term, where finding alternative suppliers probably won’t be easy.

      • The company is called Orio AB and has nothing to do with SAAB nor NEVS 🙂

        • The point is that Orio AB (formerly SAAB Parts AB) is dependent on NEVS to make selected spare parts, especially body parts. Should NEVS go bankrupt, Orio will need to find alternative suppliers.
          Another thought is that while they are indeed independent companies, NEVS and Orio AB are obviously important parts of the SAAB ecosystem. In fact, Orio AB announced recently that they will be reducing their workforce by 20% and state as main reasons the declining SAAB installed base and the lack of new SAAB’s coming to market.

    • The whole relationship with the suppliers is a very sensitive one. First given the history with SAAB Automobile’s bankruptcy (where by the way finally some money will be paid out according to a statement from earlier this week by the administrators), but secondly in terms of how expectations are being handled and met by NEVS. One could argue that Bergman and Gustafsson never should have stated initially that all creditors would be paid in full, only to be followed by this relatively vague demand to write down up to 50% about a month later. This immensely hurts credibility and as keeping a healthy supplier ecosystem is critical for any future success, this was a real miss.
      Another thought is that in the greater scheme of things, the current debt stands in no comparison to the massive investments needed to run the company, develop new models, bring them to market, etc. It remains unclear why apparently NEVS deems it to be necessary to reduce the debt with this relatively insignificant amount at the expense of supplier trust and a realistic risk of the reorganisation being cancelled.

  • Orio is in charge of spare parts – they are independent from NEVS. Some standard parts come form outside (brakes, dampers…) and can be delivered without any constraints but some of them are still produced in the current factory.
    If they get bancrupt it is in fact unsure what happens then and if another supplier is willing to produce.

    Not understandable why NEVS speculates with one of their most worthful assets (the current customer base) in this way.

  • Danke an michasaab und 9-5Aero. Besser kann man die Situation nicht kommentieren! Zum Thema Orio AB und (Blech)-Teile: wer Schlachtfahrzeuge horten kann, ist langfristig deutlich im Vorteil…

    • Welch´ Perspektive……. 🙁

  • Eine allgemeine Bitte: Es wäre bei Updates toll, wenn die auch im Text sichtbar gemacht werden würden … so sehe ich im Header oft „Update …… “ aber muss im Text suchen wo sich der Änderung befindet.

    • Thanks for the feedback. I did consider doing this yet as most of the changes were related to the timeline (and the fact that Svea Ekonomi is against a prolongation) it didn’t really make sense to have a separate call-out. We rarely update the already published articles anyway and I am expecting the next update to happen in the form of an entirely new post from Tom or myself.

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