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Saab Lines Up $40 Mil Deal to Pay Down Debt

Maker hoping it can soon re-start idled assembly plant.

by on Jun.28, 2011

Saab's factory could soon be running again - or so the automaker now hopes.

The cash-starved Swedish automaker Saab continues lining up funding that it hopes will permit it to pay off mounting debts and re-start its idled assembly plant.

A day after revealing that an unnamed Chinese company will acquire $18.4 million worth of Saab vehicles, the maker says it has a tentative leaseback deal in place to sell a majority stake in its Saab Automobile Property unit, which owns the Trollhattan plant and additional assets.  The deal, worth an estimated $40 million, could help Saab not only meet the payroll it missed last week but also cover unpaid bills claimed by its parts suppliers.

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Those vendors have been boycotting Saab since March, compounding the company’s already severe financial problems.

The latest deal would transfer a 50.1% stake in Saab Automobile Property to the Swedish real estate company, Hemfosa.  Saab’s parent, Swedish Automobile, would then sign a 15-year agreement to lease the Trollhattan plant and other facilities.  Hemfosa will also have the right to increase its stake in the property company by buying $7 million worth of shares.


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.