RPT-UPDATE 3-Deal done, Spyker faces tough road ahead with Saab

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* Analysts, investors raise questions on post-deal future

* Spyker shares shoot 50 percent higher

* Financing terms loom large over company

By Ben Berkowitz and Harro ten Wolde

AMSTERDAM/ZEEWOLDE, Jan 27 (BestGrowthStock) – Dutch luxury
sportscar maker Spyker may be the unlikely buyer of Saab but it
is set to struggle with the real challenge: converting two
loss-making companies into a profitable one.

After months of tortuous negotiations, Spyker (SPYKR.AS: )
sealed a deal with General Motors [GM.UL] to buy Saab for $74
million cash and $326 million in deferred shares, sparking
celebrations at its headquarters in the small Dutch town of

Spyker CEO Victor Muller also bought out his largest
shareholder, bank tycoon Victor Antonov, as part of the deal.

But the new Saab Spyker Automobiles NV faces huge challenges
— persistent losses, outdated designs, high labour costs,
declining sales and, perhaps above all, little belief in the
industry that it can pull off a turnaround.

“It seems like a gamble. They’ve got the new 9-5, the 9-4X
coming out next and the new 9-3 should be coming out in 2012,
which could be quite lucrative, but whether they can attract
customers back to the brand and make it profitable again is the
billion-dollar question,” IHS Global’s Ian Fletcher said.

Industry players were more direct.

“Marginal players will continue to be marginalised. We
cannot build it on hopes and dreams,” Fiat SpA CEO Sergio
Marchionne said on Tuesday as word of the deal broke.

Spyker, which makes several dozen handmade supercars every
year, is hoping to benefit from Saab’s technical resources and
its distribution network, while CEO Muller has said he hopes
Spyker will inject entrepreneurial spirit into the Saab brand.

Saab, which has lost money over the past decade, was put up
for sale more than a year ago. GM has suspended its plans to
wind down Saab operations, pending a February closing.

Investors will be hoping for few further parallels with
DeLorean, the ambitious sports car maker that used government
aid to open a factory in Northern Ireland but ended up
collapsing in the 1980s under slack sales and financing woes.


At Spyker headquarters, there were high spirits.

Hans van Rennes, Spyker’s vice president of marketing, said
a Saab dealer sent the company a cake and one-time Saab suitor
Koenigsegg called with congratulations. Outside, a Dutch
television show organised a parade of old and new Saab cars.

“I still have a hangover but it’s a pleasant one because
it’s from the champagne,” said Jantje Schaap, 50, a Saab dealer
from the town of Lemmer who joined in the impromptu auto show.

And Spyker CEO Victor Muller and Saab head Jan Ake Jonsson
were greeted with applause as they met with employees of the
Swedish carmaker at a hastily organised rally in Trollhattan,
the town in southwest Sweden home to Saab’s main plant and

“I am really stunned to see all here today. Nothing prepared
me for seeing so many people, so enthusiastic and it only
confirms that we did the right thing,” Muller said to the around
3,000 staff crowding the stage.

But happiness at Saab’s rescue aside, Spyker’s financing
remains a question. As recently as July, the company did not
have the money lined up for its 2010 production. [ID:nL742107]

The new deal includes a 400 million euro loan to Saab from
the European Investment Bank (EIB), with a Swedish government
guarantee. European Union regulators said on Wednesday they
would review the guarantee plans as early as possible.

“We have the business plan, which Saab itself can finance
with (the) EIB loan and cash flow,” said the Swedish Debt
Office’s Erik Sjulander, who oversaw talks.


FACTBOX-Key pts of deal, finances: click on [ID:nLDE60Q1CF]



Analysts at Theodoor Gilissen Bankiers in Amsterdam said
they expected Saab Spyker to eventually tap the equity markets
for financing, but also said they could not yet rate the shares
in the absence of concrete details on the firm’s strategy.

However, Spyker’s Muller said in an interview with Dutch
news agency ANP and Reuters on Wednesday the company
“absolutely” had the financing to bridge a three-year
development cycle for new Saab models.

He also denied reports that Spyker would draw on some of the
EIB loan, saying all of it will go directly into Saab.

Given all its challenges, the value of Spyker shares is also
an open question. The stock is up 240 percent since October.

The Dutch shareholders association VEB warned the deal was a
major risk. “Spyker was already a highly speculative share, and
is now even more,” VEB said in a statement.

In afternoon trading, Spyker shares rose 48.9 percent to
5.82 euros, levels last seen in late 2008.

“It’s clearly a stock traded by private investors who like
the story,” said one trader. “I don’t think it’s held in any
stock portfolios.”

Investing Tools

(Additional reporting by Reed Stevenson and Vincent Kroft in
Amsterdam, Harro ten Wolde in Zeewolde, Nick Vinocur in
Stockholm, Daniel Zdolsek in Trollhattan and Helen
Massy-Beresford in Paris; editing by Sitaraman Shankar and Karen

RPT-UPDATE 3-Deal done, Spyker faces tough road ahead with Saab