North Street Capital, which bought the luxury sports car business of the Dutch owner of Saab in September, is putting $70 million into the car maker, Reuters reported Thursday. Swedish Automobile, which owns Sweden’s Saab, said on Thursday it would accept a $10 million equity investment from the firm, and a $60 million loan to fund its ongoing reorganization.
(Reuters) – The private equity firm of racing car enthusiast Alex Mascioli, which bought the luxury sports car business of the Dutch owner of Saab in September, is to invest $70 million in the cash-strapped car maker as Chinese bridge financing looks uncertain.
Swedish Automobile , which owns Sweden’s Saab, said on Thursday it would accept a $10 million equity investment from Mascioli’s firm, North Street Capital, and a $60 million loan to fund its ongoing reorganisation.
In June, Swedish Automobile signed a non-binding memorandum of understanding for China’s Zhejiang Youngman Lotus Automobile Co to take a 29.9 percent stake and for peer Pangda to take 24 percent, for a combined 245 million euros ($338 million).
The Chinese government, however, has yet to give its blessing. Saab has doubts that the bridge funding of Youngman and Pangda, of which partial payment had been received, will be paid in full on Oct. 22, Swedish Automobile said on Thursday.
North Street Capital will buy 2.38 million Swedish Automobile shares at $4.19 each by Oct. 21 to fund Saab’s working capital. The shares traded up 17 percent at 1.1 euros shortly after the news at 1256 GMT.
The buyout firm will also give a $60 million loan collateralised on certain Saab assets, Swedish Automobile said, without elaborating. Documentation is to be finalised by Oct. 24 so that funding is available two days later, it added.
($1 = 0.725 Euros) (Reporting By Greg Roumeliotis)