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Time Running Out, Saab May Yet Be Forced to Liquidate

Purchase price might not cover debt.

by on Nov.14, 2011

Even if GM approves the sale of Saab the Chinese deal may not offer enough money to pay off creditors.

Already facing the possibility former owner General Motors will block its sale to a Chinese automotive consortium, fast-fading Saab may be forced into liquidation no matter what because the proposed $181 million purchase price would not cover its outstanding debts.

Saab has been frantically searching for a white knight since last March when unpaid partsmakers began a boycott that quickly shut the company’s headquarters assembly plant down.  With several proposed alternatives on hold the maker late last month announced it would sell its assets to an alliance formed by Chinese dealer network Pang Da and automaker Zhejiang Youngman Lotus.

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But there are growing doubts the deal can go through. And even if the sale wins approval from GM as well as Chinese authorities it may still be blocked by Saab’s creditors.

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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.

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Saab Story’s Latest Twist: Chinese Makers Take Majority Control

Deal would generate $352 million but still requires approval.

by on Jun.13, 2011

Image By: Len Katz

Saab Chairman Victor Muller agrees to sell majority control of the company to the Chinese.

Over the last several years the Saab story has taken more twists and turns than a Sam Spade detective novel, and the maker has added yet another chapter with news it has agreed to sell majority control to the Chinese.

The latest turn of events brings Zhejiang Youngman Lotus Automobile Co. into the picture, the manufacturer signing a memorandum of understanding, or MOU, that could give it a 29.9% stake in Swedish Saab.  It would now partner with Pang Da, a Chinese automotive distributor that, last month, agreed to purchase a 24% stake in cash-starved Saab.

Together, the two companies would pump $352 million into the struggling Swedish firm, which has had its headquarters factory shut down for much of the last three months due to a boycott by unpaid suppliers.  But the proposed deal isn’t yet a certainty.

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An earlier rescue effort was aborted when the Chinese government failed to give its approval.  The new alliance will need to win the go-ahead from not only the Chinese, but also Swedish regulators, the European Investment Bank – which funded the 2010 purchase of Saab – and General Motors, the company’s former parent.

On the positive side, said Saab Chairman Victor Muller, the proposed partnership “is a step that significantly strengthens Saab’s financial position and would secure the mid and long term financing of Saab Automobile.”

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Saab Resumes Production

Deal with Pang Da moves forward.

by on May.27, 2011

Saab 9-5s rolling off the Trollhattan line.

For the first time since April 4, cars are rolling off the Saab assembly line in Trollhattan, Sweden, marking a turning point in a financial crisis that came close to crushing the struggling maker.

Operations at the maker’s headquarters plant came to a halt when suppliers launched a boycott over unpaid bills.  With sales running short of expectations, the maker was forced to seek additional sources of short-term funding, but several initial proposals – including a deal with Chinese automaker Hawtai — fell through, raising questions about Saab’s viability.

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But, earlier this month, the Swedish maker lined up an alternate deal with the major Chinese dealership chain, Pang Da.  The preliminary agreement is moving ahead and Saab was able to reach an agreement with its vendors to once again begin stocking its Trollhattan plant.

“This is a great day for our company and it is great to see the plant running again. We have gone through a rough patch in recent weeks, but Saab is back in action again,” said Victor Muller, chairman of Saab and the head of the Dutch-based company that acquired the Swedish firm from General Motors in February 2010.

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