Mahindra Potentially Buying Majority Stake in NEVS

[bccz]

12.01.14 From SaabsUnited (http://www.saabsunited.com/2014/12/d...-saab-2.html):

[FONT=Arial]On November 30th one of the OEM’s currently in negotiation with NEVS, which our sources claim would be Mahindra from India has signed a Term Sheet in which the OEM states that it is willing to step in as majority owner in NEVS AB.[/FONT][FONT=Arial]The intention is for NEVS to issue new shares and that Mahindra (unconfirmed) is to purchase enough shares to gain a majority stake hold in NEVS AB.[/FONT]
[FONT=Arial]Due to the secrecy agreement between NEVS and the other partners NEVS refuses to confirm that this is Mahindra.[/FONT]
[FONT=Arial]The Term Sheet specifies the details on how negotiations are to be conducted until finalization of the deal. The finalization of the deal also calls for a direct investment into NEVS by the new majority shareholder, the new shareholder (Mahindra) will also conduct a new due diligence which will act as a complement to the one already conducted.[/FONT]
[FONT=Arial]If a positive outcome is achieved with the board of Mahindra that this deal should be continued to finalization, a bridge loan of 5 million Euros per month is to be paid out to NEVS in order to cover the running costs of the company during the reconstruction and until a finalization of the purchase which should be achieved in February of 2015.[/FONT]
[FONT=Arial]Talks with the other OEM partner (rumored to be DongFeng) is also continuing and until a finalized deal on a Joint Venture can be achieved with this partner, both parties are now preparing a development contract in which NEVS will work to develop technical solutions for this Chinese partner. These contracts will be pre-paid by the Chinese with the intention that this development will evolve to a joint venture later on. This way the partnership can be engaged on a short time-frame while negotiations continue. This deal will also support the continuation of the reconstruction.[/FONT]
[FONT=Arial]NEVS has also continued with its plan be and established a system called NEVS Industrial Services in which NEVS is offering solutions to other companies, several interested parties have entered into talks with NEVS and some offers have been made but no firm deals have yet been signed.[/FONT]
[FONT=Arial]There is also a backside to these good news and it is that the creditors are most likely assumed to cut their claims towards NEVS if a deal is to be finalized, if and how big the cut is to be is not yet discussed but it should be to such a matter that if a claim is below a certain amount, that amount would be repaid in full.[/FONT]
[FONT=Arial]The MOST IMPORTANT part in the document released by NEVS comes last, and that is that the Creditor Committee which is a selected group of the creditors have agreed that this is cause for continued support for NEVS reconstruction. This shows that NEVS have the creditors on their side, whats left is to convince the court.[/FONT]
[FONT=Arial]According to other unconfirmed sources to SU, Mahindra is also talking directly to SAAB AB regarding usage of the brand name.[/FONT]
[FONT=Arial]Read the full report from NEVS here: [/FONT]http://saabcars.com/Global/newsfiles...ruction-En.pdf

12.02.14 From Autoblog (Sitemap - Autoblog

National Electric Vehicle Sweden[FONT=arial] (NEVS), owner of [/FONT]Saab[FONT=arial], might not be dead yet, because the company is reportedly close to having a new owner with deeper pockets in near future. The declaration comes from the business's latest request to prolong its reorganization and includes the claim that NEVS has a signed letter of intent from an unnamed Asian automaker to take majority ownership of the beleaguered brand.[/FONT]

[FONT=arial]While NEVS doesn't specifically name this potential, future owner in its filing, [/FONT]Automotive News Europe[FONT=arial] cites a [/FONT]SaabsUnited[FONT=arial] story proclaiming that the suitor is none other than [/FONT]Indian automaker Mahindra and Mahindra[FONT=arial], a development that would confirm months of rumors. The Swedish automaker is reportedly just waiting for the majority investment to be finalized before making an official announcement, and the whole purchase could be complete by February. NEVS also claims that it's still negotiating with a separate, unnamed Asian automaker on a joint venture to co-develop new vehicles.[/FONT]

[FONT=arial]Assuming the deal goes through, the new owner could regain the rights to the Saab brand, too. According to ANE, negotiations are underway with the Saab AB aerospace business to be able to use the trademark again. [/FONT]NEVS lost that right when it filed for reorganization[FONT=arial].[/FONT]

Mahindra[FONT=arial] has shown interest in owning Saab for quite some time. It was reportedly [/FONT]among the final three bidders for the brand[FONT=arial] in 2012, and [/FONT]the Indian automaker was allegedly eyeing a stake in NEVS[FONT=arial] as far back as June. [/FONT]Scroll down[FONT=arial] to read the brief press release from NEVS about the extended reorganization, and the full document [/FONT]can be viewed in PDF format, here[FONT=arial].[/FONT]

[Dave T]

If Mahindra buys NEVS but doesn't have the Saab name, it will be a very difficult path. I wouldn't rule out buying a Mahindra 9-3 or Mahindra 900 but the Saab name would be an incentive to buy a car from an untested company.

[nordwulf]

the Saab name would be an incentive to buy a car from an untested company.

I wouldn't buy a car just for the name. What's left of Saab is just the name and that's it. There isn't even much of a brand anymore when you take away the history. If they only can rely on just the name to sell cars, it will be even more of a sad ending. Look at Lancia and Rover.

SU can shout all they want with their BREAKING NEWS! but they don't know much either. They have been wrong many times in the past.

All we know for sure is that "In summary, there exists a signed letter of intent between NEVS and a major OEM player", according to the press release from NEVS. Perhaps we should check with Mr. Muller and see what the value is of a letter of intent..

Just the usual rumors like "According to other unconfirmed sources to SU",and "Automotive News Europe cites a SaabsUnited story proclaiming[FONT=arial]", [/FONT]topped off with some wishful thinking and uninformed opnions. I guess they just need to sell fluff stories to their advertisers.

[tunnanxwd]

After working with too many Indian doctors and hearing them speak of the rampant nepotism there is no way I could consider an Indian engineered product.

[nordwulf]

Why does Mahindra want to buy into NEVS? Perhaps it’s better for them to let NEVS go bankrupt and then buy the brand, technology and factory from the bankruptcy. Pretty much the same like NEVS did when Saab Automobile went belly up.

[Dave T]

Probably right...a bad name would prevent me from buying a car but a good name alone wouldn't result on me buying.

New cars cost 750M to 1B to develop. Cars then cost roughly 20K to build.

Using those figures, if you expected to sell 1000 cars, the breakeven costs would be about $775,000. If you expected to sell 10,000 cars, that figure would be about $100,000 each. Expect to sell 100,000 cars and the breakeven could be $28,000.

Could I run Saab Automobile????? Ha, ha....no!

[Gepe]

Dave - bet you could (and be better at it than some have been!) Then you could go fishing for the remaining 6 days of the week.

As for any deal - Not too bothered no-one seems to think about those who drive on the left! but the Indians do unless they are driving down the middle.
I have been watching a very interesting programme on the Bombay Railways. If anyone can make them work as well as they do - the skills to run most businesses are there so why not a car company?
TPOF

[RichSPK]

You guys are so pessimistic about Indian ownership! They seem to be doing alright with Jaguar. And Mahindra is making inroads into the US tractor market. Just trying to bring a little balance to the conversation...

[nordwulf]

I am just pessimistic about any foreign ownership. It's just too bad a Swedish or other European owner can't make this work in this global economy.

Of course there still is a glimmer of hope that a new owner will bring back Saab to its former glory but it will take a very long time. But looking at Mahindra's other car company SsangYong, not sure what that future will bring.

[RichSPK]

I may have jinxed SAAB. I owned 2 Merkurs (orphaned brand), then 2 Saturns (orphaned brand), and now I'm in a SAAB.