Additionally, Spyker is set to pay to GM $74 million in cash and $326 million in preferred shares of the new company. Out of the $74 million, Spyker was already able to raise $50 million and still needs to fund another $24 million to complete the deal.
“We have a large number of investors who have expressed interest,” reaffirmed Victor Muller, Spyker’s CEO, in a statement, that he is confident to get the rest of the money to purchase Saab, which is 200 times larger than Spyker.
After the completion of the deal, Muller is planning to rename the new company to Saab Spyker Automobiles, a decision that still needs approval from Saab’s side. In addition to renaming the company, Victor is set to list the new company on the London Stock Exchange.
“Having a listing in London is a much better way of being close to investors than in Amsterdam,” Muller said during a conference call after meeting with the shareholders.
Spyker has made no plans to do any massive restructuring of Saab and will keep its original structure and employees. “We will be hiring rather than firing,” Muller said on the call. He has no intention of doing any job cuts.
The 400 million euro (US$544 million) loan will be used to revamp Saab’s production lines and propel the launch of the new 9-5 model right after the completion of the acquisition. Additionally, Muller is dreaming of a new 9-1 model, a “high end small car,” designed by Spyker. The success of these models will depend on leveraging Saab’s extensive dealer, customer network, and brand name globally.
“The main reason why we think Saab will succeed is its unique brand,” said Muller.
Cost Cutting
GM, on the other hand, is selling Saab to reduce its high operations cost that has lately put a massive strain on its finances.
Overall, GM is planning to reduce European production by 20 percent and lay off 8,300 workers while investing $15 billion in the next five years to turn around the slumping Opel and Vauxhall units.
The company is planning to reach break even in 2011 and generate first profits by 2012 from the investments if all the necessary cost savings are met, the company said.
“I am very confident this strategy will help fulfill our mission to be a leading European manufacturer,” said Nick Reilly, the CEO of GM Europe, in a statement. “The combination of adjustment and advancement will put the company back on solid footing.”
As part of the $15 billion investment over the next five years, GM needs $4.5 billion to run the business during the transformation period when Opel and Vauxhall units will be restructured. GM has already injected $816 million and is still trying to get $3.75 billion in loans from European governments.
“We will build a European company that is profitable, self-sustainable, and fit for the long-term,” said Reilly. “This keeps a manufacturing base in Europe. It is good for Europe, good for our employees and good for our customers. We therefore trust that the plan will be supported by our employees.”
The investment will mostly go toward sponsoring eight major Opel/Vauxhall launches in 2010 such as Meriva, Corsa, Movano and Astra Sports Tourer. In 2011 GM is planning to have another four launches including the all-electric vehicle Ampera.
“Opel/Vauxhall has a clear vision: to be a leading European manufacturer of high quality, desirable automotive products, based on German engineering, driven by a united team of professionals, and respected around the world. This vision will be realized by offering an exciting technology,” said Reilly.
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