Saab's new owner has history of unpaid debt

Victor Muller, the man behind Spyker's acquisition of Swedish car maker Saab deal, has never been shy to put other people’s money to use, sometimes losing it in the process.

Dutch sports car manufacturer Spyker last week bought Saab from its American owner General Motors, saving the Swedish auto maker from certain demise. The deal is considered so important, even the Dutch prime minister felt inclined to comment on it during his weekly press conference on Friday. „A tour de force by Victor Muller”, is how Jan Peter Balkenende called the takeover. “You need guts to pull a move like this,” said the prime minister, a long-time friend of Muller’s and fellow car aficionado.

The takeover was greeted with enthusiasm in Sweden, where Saab’s continued existence will leave 8,000 people (employees, dealers and suppliers) gainfully employed for the time being. Analysts have called the financial construction supporting the deal risky, but that is Muller’s style. “Victor is quick to jump from one financial ice floe to the next,” said Maarten de Bruijn, a former partner of Muller’s in Spyker.

Muller's backers remain anonymous

General Motor’s asking price for Saab was 400 million dollars. Spyker did not have that kind of money on hand and will be paying 74 million in cash and 326 million in preferred stock instead. Muller has refused to divulge his financial backers. The paper trail leads to a dead end called Tenaci Capital, a specially created investment vehicle funded by anonymous third parties.

Friend and foe alike call Muller inventive, adventurous, and praise his pioneering attitude. He is also seen as obstinate and financial creative – with other people’s money that is.

Victor Muller was born in Amsterdam in 1959. When he was 11 his family moved to a well-to-do town just outside of the city, where he was brought up in a milieu he has described as “posh”. Muller’s father owned an accounting business and would often take his son bird watching. His mother hails from a long line of biologists. Muller himself studied law at Leiden University and was active in fraternity life. “Victor was a party animal,” Jeroen Kodde, a former frat-brother of Muller, recalled. He was not socially engaged, nor politically active or athletic. “While we were still riding our bicycles through town and toying with old cars, Victor was already cruising around in a Lancia with a pretty girlfriend,” Kodde said.

A former party animal

As a student, Muller interned at the Amsterdam law firm Caron & Stevens. According to Willem Stevens, his then boss, Muller left such a good impression the firm offered him a job fresh out of university. “A fine lawyer. A hard worker with a businesslike mentality,” Stevens described him. Muller was offered a partnership position, but he left after four years with the firm when a client, Heerema offshore group, offered him a job.

At Heerema, Muller was responsible for mergers and acquisitions. With his help, his new employer grew into a company employing 5,000 people with an annual turnover of a billion euros. But Muller wanted more, specifically, to start his own business. A small Heerema subsidiary, Wijsmuller, drew his interest. This IJmuiden-based salvage company was still operating at a loss when Muller, with outside backing, bought a 50 percent stake in business. After two years under Muller the company was posting a 15 million euro profit.

In 2001, Muller sold Wijsmuller to the Danish shipping conglomerate Maersk. He also played a part in the IPO of McGregor, a Dutch fashion house. In an interview published in business monthly Quote in 2004, Muller claimed his net worth totalled 16 million euros. A fortune which he has mostly squandered chasing his boyhood dream: a reintroduction of the Dutch sports car brand Spyker.

A break-up with a former partner

Engineer Maarten de Bruijn was Muller’s partner in this pursuit. In 1990, he began developing a super sports car. Muller was the “motivator, speaker and smooth-talker” driving the initiative, De Bruijn recalled. “He made sure I got the funding and name recognition I needed to get on with developing my cars. Great teamwork while it lasted.” Teamwork that came to an abrupt end when Muller wanted to take Spyker public. “Victor likes to think big and conceptually. He likes glamour. I was neither willing or able to work like that.” De Bruijn left Spyker in 2005.

Five years on, Spyker’s only real accomplishment is its continued existence. The company has produced 204 cars since it was founded, earning it only 54 million euros. Its posted losses accumulate to 120 million euros over the same period. Muller’s brain child has only been able to survive by raising capital through stock emissions. Dutch business tycoon and billionaire Marcel Boekhoorn owns a slice, as does the Arabic investment fund Mubdala and the Russian billionaire Vladimir Antonov. Muller retains only a nine percent interest in his company.

Creative financing causes trouble

Money has always been a problem for Muller. Financially speaking, his private and business interests are also closely intertwined. In the summer of 2006 he got in trouble when private bank Theodoor Gilissen asked for extra security on a private loan worth 1.75 million euros backed with Spyker stock as collateral, after a downturn in the market. Muller asked the bank to wait for a couple of days, saying Spyker would announce “some important good news” a day later. Theodoor Gilissen immediately reported him to the stock-market watchdog for leaking insider information. Muller was fined 96,000 euros. He has appealed his sentence and has so far refused to settle the matter out of court.

Five years earlier, Muller found himself at odds with Fortis bank, when he surpassed his credit limit by several million euros. Its board of director’s was not pleased when it found that the Amsterdam regional manager was a close friend of Muller. The bank manager had spent some time living in a house owned by Muller when he was having marital troubles. Muller was reprimanded by Fortis’ higher management and told to repay the money immediately.

Sports car falls apart spontaneously

Boekhoorn was the first to order a Spyker when production began in 2000. His order was long delayed due to technical difficulties with production. When he was finally able to take his first ride in 2002, the 360,000 euro car proved to be in anything but perfect condition. After a few hundred metres on the road the hood popped open spontaneously. No one was injured in the process.

Boekhoorn played a more substantial role in Spyker’s the acquisition of the Midland Formula-1 team in September 2006, when he lent Muller 11 million after an investor backed out. Muller underwrote the loan personally and promised to pay him back in two weeks, but he never fully did. In return for 7.5 million euros left outstanding, Boekhoorn received a 5 percent interest in Spyker.

Boekhoorn is frequently named as a silent partner in the Saab-deal. He has denied funding the takeover, but is known to have been party to the deal in an advisory capacity.

Muller, meanwhile, seems undaunted. Today he announced that he intended to return Saab to profitability by 2012.