Despite yesterday’s relatively good news, it seems really hard for the troubled car maker in Trollhättan to get to a Happy Ending. Just when there were some shimmers of light at the end of the tunnel (exit of the reorganisation), rumours about Mahindra no longer being interested pop up in the media. Supposedly Mahindra lost interest in November already(!)
Lost interest in November over SAAB AB?
Today’s article in Swedish daily SVD is stirring up the pot pretty fiercely in stating that Mahindra supposedly lost interest in November already, yet signed the letter of intent to become majority owner in NEVS anyway that was later to be used as one of the key pieces of collateral in Court by the Administrator at the time of the application for the first extension on 2 December.
The author Jonas Fröberg quotes „a source in the consultancy sphere“ (i.e. someone who allegedly has been part of the group of advisors around the reorganisation) and also adds that SAAB AB had been informed by Mahindra about the situation and their intents around that same time.
The theory that Fröberg lays out is that (one of) the key reason(s) that Mahindra lost interest was because of the issues in the negotiations with SAAB AB around the trademark license.
The article has some quite harsh statements and I want to highlight two of them specifically:
„SAAB AB was tired to give away the trademark for free only to receive bad press for it in return. That is why SAAB AB wanted to get paid for the trademark license and that was when Mahindra realised that their business case wouldn’t hold. The risk exposure became to big and they wanted to get the trademark license for free, and that’s where the discussions died in November.“ When I read this sentence, I had to read a few times again. Why would anyone expect to be able to license a trademark for free? I don’t have insight into the current and previous license agreements, but that seems like a really unlikely scenario, let alone the single most important reason for the deal to collapse.
„…Mahindra had a few weeks earlier -in mid November- cancelled the trademark negotiations with SAAB AB. Mahindra then, as confirmed by the Administrator, signed a non-binding contract at the end of November. But Mahindra had -according to the source- no intentions to buy NEVS and only did it to provide NEVS more time to find new solutions.“ This again sounds unlikely. Assuming for a moment that the negotiations had indeed been cancelled, why on earth would Mahindra state something they clearly weren’t intending on a paper that was going to be used in Court and why would the Administrator clearly and explicitly in both extension applications confirm the progress on the negotiations? I am not a legal expert but if what the article states is true, the recent actions from Mahindra, the Administrator and NEVS are punishable by law.
So most of the time, where there is smoke there is fire. The fact alone that NEVS doesn’t have a signed contract with secured long-term funding in place yet isn’t a reason necessarily to worry or get suspicious in my view. International mergers and acquisitions generally do take considerable time so that’s not it. There does seem to be something around the so essential trademark license though that doesn’t add up and there may be other areas where stated intent and reality differ.
SAAB AB declined to comment on the SVD article (I guess they have their hands full dealing with the crisis the Swedish government caused earlier this week in canceling a contract with Saudi Arabia, but this is off-topic), yet NEVS‘ Mikael Östlund was clear in stating „I don’t comment on rumours, but the negotiations with the two vehicle manufacturers are ongoing“.
I think we’ll have to leave it at that. At least for now…
Update 13 March: the quoted article was first published yesterday around 06:30 CET on SVD.se. The story subsequently didn’t appear in the printed edition of the newspaper today. This to me is highly unusual given the scope and weigth of the online article and reason for more question marks in line with Swade’s comments. Someone is obviously not telling the truth and that should be stopped, now.