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Saab Leaving Most Debts Unpaid

Only a select few likely to get cash back.

by on Apr.12, 2012

Among the assets of the now insolvent Saab: the Phoenix Concept car, (Photo by Len Katz).

The factory in Trollhattan stands idle but the bookkeepers and bankruptcy attorneys have been keeping busy in recent weeks trying to tally up the debts owed by the now-insolvent Saab Automobile and compare that to the company’s few remaining assets.

The math doesn’t work out well for those Saab owed money to.  The final balance sheet shows assets of $532 million (3.6 billion Swedish kronor) but debts of $1.9 billion (13 billion kronor).  It is possible that the tally will look more favorable, however, if the trustees overseeing Saab’s bankruptcy are able to find a buyer – with as many as seven bidders reportedly looking closely at the company.

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Nonetheless, the bottom line isn’t a good one: a lot of folks looking to recover money from the doomed maker are likely to wind up with nothing.  Among those least likely to come out whole are Saab’s Swedish employees.  They actually pressed for the bankruptcy filing in hopes of recovering months of back pay.  Those workers are owed $89 million.

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Saab Decision Delayed

Maker gets bridge loan but fate still uncertain.

by on Nov.23, 2011

A partially assembled Saab sits idle in Trollhattan. The plant has been shuttered since March.

Saab’s fate appears to be hanging by a thread despite finally receiving a cash infusion from a Chinese alliance looking to buy the struggling Swedish automaker.

Any decision on the fate of Saab has been delayed as the Swedish court that was scheduled to hear arguments over the company’s reorganization has temporarily put off a decision. No date has been set for a new hearing, Saab officials said.  There had been pressure from Saab creditors – and its Swedish unions – to force the company into bankruptcy, which would likely have shut it down.

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Meanwhile, Saab officials are growing slightly more confident about receiving final approval from the Chinese government for the deal that will allow an infusion of Chinese cash into the company. Last summer, dealer network Pang Da and automaker Zhejiang Youngman Lotus initially agreed to purchase a majority stake in Saab. They are now hoping to purchase the maker outright – but for barely a third of their original offer.

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$157 Mil Bank Deal May Save Saab

Meanwhile, Saab owners halt sale of Spyker sports car unit.

by on Sep.02, 2011

A partially assembled Saab sits on the line in Trollhattan. The plant has been shuttered since late March.

Cash-starved Saab Automobile is close to landing a $157 million bank loan that could help it steer clear of bankruptcy, according to reports.

The deal, if completed, would provide enough cash to cover current salaries, pay off angry suppliers who’ve been threatening to force the carmaker into foreclosure and possibly even get the maker’s headquarters assembly plant, in Trollhattan, Sweden, running again for the first time since suppliers began boycotting Saab in late March.  But as with a variety of other rescue efforts, it is taking longer than expected to lock down the billion-kronor loan.

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Saab’s situation has been steadily deteriorating since then despite the maker inking a variety of deals – including one with China’s largest auto distribution network, Pangda – which were supposed to raise the cash necessary to cover its bills.  One deal collapsed soon after it was announced, while most of the others have run into a miasma of regulatory delays that have kept much-needed cash out of Saab’s corporate coffers.

But in a surprise move, parent Swedish Automobile says it has suspended plans to sell its Spyker sports car subsidiary to the Russian banking tycoon Vladimir Antonov.  The $46 million deal was intended to raise cash and permit the company to focus on its larger, Swedish-based business.

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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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Another White Knight Appears for Saab

Third Chinese company offers $18 million to cash-starved Swedes.

by on Jun.27, 2011

Saab lines up a deal to sell nearly 600 vehicles, raising $18 million in desperately needed cash.

It’s getting hard to tell the players without a scorecard, especially as Saab continues to spread its net hoping to come up with cash that can keep the financially struggling company afloat.

Less than a week after admitting it doesn’t have the resources to make payroll, the Swedish maker has announced yet another Chinese company has offered to lend it a hand, this time agreeing to pay $18.4 million in cash for 582 unsold Saab cars.  Meanwhile, efforts continue to win the approval of regulators in Europe and China needed to ensure that several other proposed deals can be completed, giving Saab enough cash to get it beyond the current crisis.

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“I am pleased to announce this agreement as it secures part of the necessary short-term funding for Saab Automobile and allows us to pay our employees’ wages before the end of this month,” Chief Executive Victor Muller said in a statement.

But it remains to be seen whether the latest bailout will be enough to get Saab back into production again, observers caution.

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Saab Misses a Payday

Maker blames “short-term funding” issues but long-term survival increasingly uncertain.

by on Jun.23, 2011

The Saab assembly plant, in Trollhattan, will remain shut until at least July 4.

Despite the appearance of two Chinese white knights, the situation continues to deteriorate for Saab, the struggling Swedish automaker missing a payday for 3,800 of its employees.

On Monday, Saab officials met with workers at the company’s Trollhattan assembly plant and advised them not to return to work until July 4.  The plant has been out of operation since June 8 due to problems paying suppliers.  A prior boycott by partsmakers had led to a two-month shutdown that only ended in late May.

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The latest short-term crisis raises further concerns about Saab’s long-term viability, one analysts warning, “Time is a luxury it no longer has.”

“Swedish Automobile N.V. (Swedish Automobile, formerly Spyker Cars N.V.) announces that Saab Automobile AB (Saab Automobile) will be unable to pay the wages to employees as it has not yet obtained the necessary short-term funding,” Saab’s parent company said in a release this morning.

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Saab Production Halted Again

Production “easily disturbed” by maker’s ongoing financial problems.

by on Jun.08, 2011

Saab's Trollhattan plant grinds to a halt once more.

Cash-starved Saab’s assembly lines have come to another grinding halt as the maker struggles to resolve a financial crisis that has shut down its headquarters plant for much of the last two months.

The news that the Trollhattan plant is down again, and likely won’t be running until at least next week – at the earliest – is a setback for the Swedish maker, which had hoped to resolve its problems with the partnership it inked last month with China’s largest dealer network.

But “the liquidity situation is still tense,” the Swedes acknowledged today, despite an initial payment from Pang Da.  A number of other issues apparently have yet to be resolved, a Saab release noted, meaning production can be “easily disturbed” in the near-term.

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“It is therefore very difficult to make further predictions,” as to when the Trollhattan plant will resume operations – and for how long, acknowledged production director Gunnar Brunius.  As a result, he said, “We have to take one day at a time. In order to avoid taking on more supplies than necessary, we have decided to reduce production plans this week. We are all working hard to get production running consistently again, and as soon as possible.”

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Saab Plant Ready to Resume Production

"I blame myself," says Saab's Acting CEO.

by on May.11, 2011

A partially-assembled 9-5 body sits on the currently idled Saab Trollhattan assembly plant.

With its new investors on board and a new chief operating officer in place to direct its business in the U.S., Saab AB expects to restart its main assembly plant in Trollhattan Sweden, the company’s chief shareholder and  acting chief executive officer told TheDetroitBureau.com.

Victor Muller, Saab’s acting CEO, also said he expects to recruit a new, permanent CEO soon and took responsibility for the recent confrontation with suppliers that forced Saab to close the Trollhattan plant and undermined the company’s reputation.

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“I blame myself for what happened,” Muller said during an unusually candid moment before a dinner with journalists in Washington D.C.  Muller earlier told TheDetroitBureau.com that when suppliers threatened to halt deliveries over unpaid bills he decided to resist – to unexpected results.

Earlier this year, Saab was beginning the transition away from the GM’s purchasing organization, which meant that the terms and conditions of specific contracts were also in flux. As the terms began to change, some of the suppliers balked and in Muller’s words he decided “to call the bluff” of one key supplier.

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Chinese Deal Saves Cash-Starved Saab

Production set to resume, Swedish maker eying range of new product offerings.

by on May.03, 2011

Production of the Saab 9-5 will resume in Sweden and could soon begin in China, as well.

Swedish automaker Saab has found its white knight – or more accurately several of them – securing at least its near-term survival.

The maker has lined up a new alliance with ambitious Chinese manufacturer Hawtai Automotive Group, while also securing some much-needed cash in the form of a loan from the Gemini Investment Fund. Meanwhile, Saab officials say they anticipate a further investment will follow from Russian businessman Vladimir Antonov.

The impact of the various deals will be significant for cash-starved Saab, both in the short and long-term.  The initial financial infusion – 180 million Euros, or $266 million – should permit Saab to quickly re-open the headquarters assembly plant, in Trollhattan, Sweden, that was shuttered on March 29th due to a boycott by unpaid suppliers.

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The alliance will also provide a manufacturing base for Saab in China, which the company hopes will significantly expand its presence in the world’s largest and fastest-growing automotive market.

Longer-term, Saab Chairman Victor Muller told TheDetroitBureau.com, Saab may now be able to fund the development of some much-desired new product programs, including a small luxury car tentatively named the 9-2, and possibly a large SUV, among other vehicle options.

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Saab Forming Partnership with Chinese Automaker Hawtai Motor Group

Additional deal with Gemini Investment should help reopen Saab plant this week.

by on May.02, 2011

Saab hopes to restart its Trollhattan plant this week.

Struggling to head off a collapse, the cash-strapped Swedish carmaker Saab has lined up a pair of deals that could allow it to reopen its headquarters assembly plant later this week.

Saab’s Dutch parent company, Spyker Cars NV, plans to borrow 30 million Euros ($44.6 million) from the Gemini Investment Fund, money that apparently will be used to pay off suppliers who have been boycotting the Swedish maker for nearly a month.

“We’re hoping to restart production in the next week, however it’s dependent upon our conversation with suppliers and parts availability,” cautioned Saab’s U.S. spokeswoman Michele Tinson.

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While the Gemini deal could head off a near-term catastrophe, the longer-term news involves the aspiring Chinese automaker Hawtai Automotive Group, which plans to announce a new partnership with Saab on Tuesday during a Beijing news conference.

Sources tell TheDetroitBureau.com that Vladimir Antonov, the wealthy Russian businessman who had hoped to pull off a deal of his own with Saab may yet align himself with the struggling maker as part of the latest developments.

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