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Saab Gets Another Reprieve

Chinese come through with $97 million bridge loan.

by on Oct.14, 2011

The bridge loan might just let Saab restart assembly operations next month.

For anyone disappointed to see soap operas vanish from American television there’s always the Saab saga to fall back on.

Just days after is seemed the maker was going to be forced into an involuntary bankruptcy it has been given at least another temporary reprieve, it has received the first installment of a $97 million bridge loan from one of the two Chinese companies looking to eventually buy a controlling stake in the struggling Swedish automaker.

Automaker Zhejiang Youngman Lotus reportedly has cut a $15 million check for Saab and should have the full $97 million deposited in the troubled Saab’s bank account within the next week or so.  It had appeared increasingly likely that the Chinese carmaker and China’s largest auto dealer, Pang Da, were not going to get approval from Beijing regulators to complete their acquisition of a majority stake in Saab.  With no new sources of cash, the Swedish maker would have been forced into what likely would have been the break-up of the company.

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The new loan should help Saab cover at least some of its bills.  It owes millions to 3,600 Swedish employees – which prompted their unions to try to force Saab into bankruptcy.  But it also owes millions to key suppliers.  Those partsmakers have been boycotting the company since late March over unpaid bills.  As a result, Saab hasn’t produce any cars at its headquarters plant in Trollhattan for more than six months.


Saab May Be Hours From Bankruptcy

Chinese deals appear dead.

by on Oct.11, 2011

A new Saab 9-4X with the 9-5. Production of the latter model has been on hold since late March.

With a pair of Chinese deals apparently ready to collapse, it appears that embattled Swedish automaker Saab may be mere hours away from bankruptcy.

The administrator put in charge of helping Saab reorganize appears to be losing patience as several proposed partnerships fail to materialize for the Swedish marque.  Barring a last-minute breakthrough, Swedish newspapers say he could pull the plug and force Saab into formal bankruptcy, effectively spelling the end for the maker.

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Saab had hoped to turn to two Chinese allies, dealership network Pangda and automaker Zhejiang Youngman Lotus, to generate more than $200 million in much-needed cash – including a $96 million short-term bridge loan.  But the loan has repeatedly been delayed and it appears now that the Chinese government is refusing to authorize the deals because it does not believe Saab can provide the sort of intellectual property the money would justify, according to Svenska Dagbladet.

“We are still expecting the Youngman loan to come in,” insisted spokeswoman Gunilla Gustavs, but the maker has been saying the same thing for weeks.


Saab Shooting to Re-Start Production Mid-November

Maker now under court protection.

by on Sep.26, 2011

A Saab 9-5 in the Trollhattan plant.

Struggling under court protection to raise cash and pay off angry creditors Swedish automaker Saab hopes to get back into the business of building cars by sometime in mid-November.

That is just the latest in a series of plans to restart the company’s headquarters assembly plant in Trollhattan, Sweden, however, and skeptics would be far from surprised if the maker misses that goal, as well.

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After being rescued from the automotive rubbish heap in early 2010, Saab’s new parent – now known as Swedish Automobile – fell short of its sales targets and steadily deeper in debt.  By late March of this year the company’s unpaid vendors decided to boycott, leading to the shutdown of the Trollhattan plant.


Swedish Court Rejects Saab’s Reorganization Bid

Maker to appeal – but is time running out?

by on Sep.08, 2011

Saab is building the new 9-4X but potential customers are still steering clear.

Time – and patience – may be running out for the embattled automaker Saab, a Swedish district court rejecting the maker’s request to go into reorganization, a process that would protect it from workers and others owed millions in cash while it comes up with plans to replenish its coffers.

Saab officials say they intend to appeal the decision by the Vanersborg District Court but observers have begun to believe that the financially strapped maker might now be forced into an involuntary bankruptcy – even though several Chinese companies are themselves waiting for regulatory approval on plans to acquire a majority stake in Saab’s parent, Swedish Automobile.

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“It appears unclear if – and if so when – the relevant Chinese authorities will approve the agreements,” the court said to explain its decision.

Saab has been struggling for a number of years but appeared to get a reprieve in early 2010 when General Motors sold the ailing firm to Swedish Automobile, then known as Spyker Cars.  But it soon became apparent that the new owners were woefully underfunded.  And, in late March, unpaid suppliers began a boycott that forced the maker to idle its headquarters plant in Trollhattan.


$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.


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.”


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.


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.


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.”