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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.

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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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