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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 Reportedly Seeking Court Protection

Maker hoping to buy time to line up new funds.

by on Aug.26, 2011

Image By: Len Katz

Saab Chairman Victor Muller may be forced to seek court protection to avoid the complete collapse of the Swedish company.

With another payroll likely to be missed and suppliers still refusing to provide the parts it needs to re-open its headquarters assembly plant, Saab is reportedly ready to seek court protection to buy time as it goes searching for more funding.

The news came hours after the maker said it would delay the release of its first-half 2011 financial report.  That report, now scheduled for next week, is expected to be grim.  The maker has produced only a small number of vehicles since it was struck by a supplier boycott, in late March, triggered by unpaid bills.  Despite lining up a series of potential alliances that management had hoped would resolve its financial problems those deals remain tied up in bureaucratic analysis leaving the maker struggling for its survival.

In a terse statement, parent company Swedish Automobile N.V., or SWAN, said it was “aware of certain reports in Swedish media related to a possible filing…for a voluntary reorganization under Swedish law.”

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The statement neither confirmed nor denied the reports, first aired on Swedish public radio but said only that the company is “evaluating all available options” and is “in discussions with several parties to secure the short-term and medium-term funding of Saab Automobile to restart and sustain production.”

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Saab Steers Clear of Bankruptcy – for Now

Workers agree not to press for bankruptcy – but factory remains closed til Aug 29 at earliest.

by on Aug.08, 2011

It could be Aug. 29 before Saab's Trollhattan plant begins running again.

It’s becoming almost the norm for Saab, the maker fighting off yet another threat that could drive it into bankruptcy.  This time, however, it’s the maker’s workers who were threatening to deliver the coup de grace.

The union representing 1,600 salaried employees in Sweden had been ready to go to court to push the company into bankruptcy in their pursuit of paychecks that had been due last month.  The company quickly came up with the necessary cash – but still hasn’t found the money it needs to get suppliers to start shipping parts to the factory in Trollhatten.

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Saab had been hoping to re-open the plant by last week.  But parts manufacturers have been boycotting the headquarters factory since late March, leading to a growing shortage of Saab 9-3 and 9-5 models – and further complicating the struggling Swedish maker’s efforts to stave off collapse.

“We still need to reach an agreement on a delivery plan with suppliers,” said spokeswoman Gunilla Gustavs, who says the maker likely won’t re-launch production until at least August 29th.

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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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Workers Paid, Saab Reveals 3 New Products

Maker outlines plans with new Chinese partners.

by on Jul.05, 2011

Saab hopes to relaunch production at Trollhattan in the coming days.

Still struggling to re-start the assembly plant that has been idled for most of the last three months, Swedish automaker Saab has announced plans to add three new models to its line-up.

The maker has been lining up a coterie of partners, in recent weeks, raising funds to overcome its ongoing cash problems.  A $40 million deal to sell and then lease back its Trollhattan plant, along with a $36 million bridge loan, could resolve its most immediate problems, allowing production to resume sometime in the coming days.

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But even before the Trollhattan plant starts rolling again, Victor Muller, Chairman of Saab and its parent, Swedish Automobile, announced three new products that are either a much-needed plan for the future, or little more than wishful thinking.

“We will now be able to develop a small entry-level Saab, a car that has long been on the top of our wish list,” says a statement from Muller, who noted Saab also wants to add two models bigger than its current offerings.

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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.

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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 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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Saab China Deal Unexpectedly Collapses

Swedish maker scrambles for alternative.

by on May.12, 2011

Image By: Len Katz

Despite deal's collapse, "I'm always optimistic," said Saab boss Muller.

The deal with Chinese automaker that was supposed to rescue cash-starved Saab has collapsed, the Swedish maker revealed this morning, leaving it scrambling to find an alternative source of cash to pay suppliers and re-open its shuttered factory.

The collapse of the partnership appears to have been caused by Hawtai Automotive Group’s inability to get the necessary approval from Chinese bureaucrats who closely regulate the industry. A similar problem prevented the planned Chinese takeover, two years ago, of General Motors’ now-abandoned Hummer brand.

Strained for cash to pay its bills and unable to get approval from the European Investment Bank to sell its factory and other assets to a Russian banker, Saab announced last week it would sell a 29.9% stake to Hawtai. The Chinese also offered a short-term loan in a deal collectively valued at 150 million Euros, or $216 million.

The proposal would have also given Saab access to Hawtai production plants in China, potentially opening up an opportunity to penetrate the world’s largest automotive market.  And, as TheDetroitBureau.com reported, Saab was considering ways to distribute Hawtai – or other Chinese – products in the U.S.  (Click Here for more.)

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But most importantly, Saab had hoped to use the cash to pay off suppliers who have been boycotting its Trollhattan assembly plant since March 29, putting a hold on production of its core 9-3 and 9-5 models.  Saab Chairman Victor Muller told TheDetroitBureau.com he was hoping to re-open the factory next week.

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