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Saab Files For Bankruptcy

No options left, Muller pulls plug.

by on Dec.19, 2011

Image By: Len Katz

Saab Chairman Victor Muller expects to write down his investment in the company as it files for bankruptcy.

Having used up all its options, long-struggling Saab has filed for bankruptcy, ending a desperate bid for survival that began even before it was sold off by General Motors in early 2010.

Victor Muller, the Dutch entrepreneur whose small firm purchased Saab from GM personally appeared in the Vanersborg District Court, in southwestern Sweden, this morning to hand in the bankruptcy papers.  The move came days after Saab had won one last reprieve, the court firing the original administrator and giving the automaker a chance to come up with a workable deal with the Chinese automaker Zhejiang Youngman Lotus, which had offered to purchase Saab outright.

It is up to the courts to now decide what to do with Saab’s assets, and though there remains some hope they could be purchased in their entirety it is uncertain whether the now-bankrupt maker has much to offer anyone else in the industry.  While its headquarters factory in Trollhattan, Sweden is considered one of the Continent’s more modern there is already a glut of capacity and many manufacturers are looking ways to cut production rather than add to it.

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While Muller didn’t speak with the media, a statement from Saab suggested that General Motors was to blame for the company’s final collapse.  GM had notified Saab that it would not approve a sale to the Chinese.


Cash-Starved Saab Purchased by Chinese

Current owners take substantial hit; new owners still have to get factory re-opened.

by on Oct.28, 2011

One of the first goals for Saab's new owners will be to reopen its shuttered Swedish assembly plant.

Facing imminent collapse, Saab has agreed to a fire sale that will give two Chinese companies complete control of the Swedish automaker – thought the deal must still be approved by Chinese regulators.

The 100 million Euro – or $141.4 million — purchase price is a fraction of what the two new owners had originally offered for a significantly smaller stake in Saab, but the company appeared to have few other option, with a court-appointed administrator ready to force the troubled firm into bankruptcy.

Saab becomes the second Swedish automaker to fall into the hands of the Chinese, following Ford Motor Co.’s sale of its former Volvo subsidiary to China’s Zhejiang Geely Holding Group Co. in early 2010.

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The new deal means “a much stronger future for Saab,” proclaimed Tim Colbeck, CEO of Saab’s U.S. sales subsidiary, during a conference call Friday morning. Colbeck said that efforts will begin almost immediately to re-open the automaker’s primary assembly plant, which has been idled by financial problems since March.


Saab’s Chinese Deals Collapse

Terms complete takeover bid “unacceptable.”

by on Oct.24, 2011

Image By: Len Katz

The Chinese deal lined up by Saab CEO Victor Muller appears to have collapsed.

Even as it appears ready to tumble into complete collapse, Saab has rejected a bid by two erstwhile Chinese partners to completely take over the troubled Swedish company.

The decision comes months after Saab negotiated a less extensive alliance with China’s Pang Da and Zhejiang Youngman Lotus – that deal still tied up by Chinese regulators.

The decision to pull back from the Chinese comes at an especially awkward time for Saab.  An administrator last week indicated he would seek to have the carmaker’s court-protected financial reorganization terminated. With its headquarters factory closed and relatively little money available observers believe Saab could be a matter of days away from being forced into insolvency.

Ironically, that could make it possible for one or both of the Chinese companies to seek to purchase what would be left of Saab’s assets, according to several industry observers.

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The breakdown with Pang Da, China’s largest auto retailer, and carmaker Youngman Lotus came about because they had “failed to confirm their commitment” to the agreement announced over the summer and – more notably – had failed to provide desperately needed bridge funding, according to Swedish Auto, the parent of Saab.


Saab Gets Another Reprieve

Chinese come through with $97 million bridge loan.

by on Oct.14, 2011

The bridge loan might just let Saab restart assembly operations next month.

For anyone disappointed to see soap operas vanish from American television there’s always the Saab saga to fall back on.

Just days after is seemed the maker was going to be forced into an involuntary bankruptcy it has been given at least another temporary reprieve, it has received the first installment of a $97 million bridge loan from one of the two Chinese companies looking to eventually buy a controlling stake in the struggling Swedish automaker.

Automaker Zhejiang Youngman Lotus reportedly has cut a $15 million check for Saab and should have the full $97 million deposited in the troubled Saab’s bank account within the next week or so.  It had appeared increasingly likely that the Chinese carmaker and China’s largest auto dealer, Pang Da, were not going to get approval from Beijing regulators to complete their acquisition of a majority stake in Saab.  With no new sources of cash, the Swedish maker would have been forced into what likely would have been the break-up of the company.

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The new loan should help Saab cover at least some of its bills.  It owes millions to 3,600 Swedish employees – which prompted their unions to try to force Saab into bankruptcy.  But it also owes millions to key suppliers.  Those partsmakers have been boycotting the company since late March over unpaid bills.  As a result, Saab hasn’t produce any cars at its headquarters plant in Trollhattan for more than six months.


Swedish Court Rejects Saab’s Reorganization Bid

Maker to appeal – but is time running out?

by on Sep.08, 2011

Saab is building the new 9-4X but potential customers are still steering clear.

Time – and patience – may be running out for the embattled automaker Saab, a Swedish district court rejecting the maker’s request to go into reorganization, a process that would protect it from workers and others owed millions in cash while it comes up with plans to replenish its coffers.

Saab officials say they intend to appeal the decision by the Vanersborg District Court but observers have begun to believe that the financially strapped maker might now be forced into an involuntary bankruptcy – even though several Chinese companies are themselves waiting for regulatory approval on plans to acquire a majority stake in Saab’s parent, Swedish Automobile.

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“It appears unclear if – and if so when – the relevant Chinese authorities will approve the agreements,” the court said to explain its decision.

Saab has been struggling for a number of years but appeared to get a reprieve in early 2010 when General Motors sold the ailing firm to Swedish Automobile, then known as Spyker Cars.  But it soon became apparent that the new owners were woefully underfunded.  And, in late March, unpaid suppliers began a boycott that forced the maker to idle its headquarters plant in Trollhattan.


Saab Production Resumes in August, But Maker Still Faces Major Challenges

Putting the emotion back into a “passion brand.”

by on Jul.07, 2011

The first Saab 9-4X crossovers rolled into U.S. dealer showrooms this week.

With cash in hand to pay both workers and boycotting suppliers, Saab will re-start its Swedish assembly line on August 9th, the automaker confirmed, though company officials acknowledge Saab still has a tough battle ahead if it hopes to reverse the financial problems that nearly shut it down over the last three months of frantic deal making.

While the maker continues to look for additional revenue sources to help ensure it won’t run into another cash crunch, the upcoming challenge will be to not only resume production but get buyers back into the carmaker’s 199 U.S. showrooms, said Tim Colbeck, President and Chief Operating Officer of Saab Cars North America.

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“Our priority,” he said, during a small briefing for Detroit journalists, “is to instill confidence in the brand.”

There hasn’t been much of that in recent months.