It’s not only people that need the occasional short term funding. Saab, the Swedish car manufacture, had to stop production of cars over a month ago because it had run out of money. Normally this would result in either a fire sale or the site being mothballed until underlying trading conditions were considered better, something which occurs huge costs when production needs to be restarted.
Unsurprisingly, Saab executives didn’t like the look of either option and choose a third way instead. The third way was the to secure $88m of short term funding from an investor in it’s parent company Spyder Cars. The loan is in the form of a six month convertible loan note which will convert into equity if repayment terms are not met.
The loans was provided by the Gemini Fund, an investor in the parent company, and was provided to allow Spyder Cars to continue to seek fresh capital from Russian or Chinese sources. The Swedish Debt Office having recently approved an investment up to 29.9% of equity by Russian businessman Vladimir Antonov. This investment is not considered enough by Victor Muller, the Chief Executive of parent company Spyder who is reported to be talking to several Chinese companies including Great Wall Motor and Jiangsu Yueda Group about further funding.
