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This Saab Story Apparently Won’t End

Several investors claim to be “near” purchase of bankrupt Swedish maker’s assets.

by on Jun.04, 2012

The Saab Phoenix Concept. Will the name prove prescient for the now-bankrupt Swedish maker?

At the 2011 Geneva Motor Show, Saab unveiled a concept car called the Phoenix, named to symbolize the maker’s seeming rebirth from the ashes.  It was clearly premature, as we now know, the maker soon forced into bankruptcy.

Yet, there may still be life in the old brand, a number of potential investors insisting they are close to pulling off a deal that could, indeed, bring Saab back from the dead.  Among the potential rescuers are a Chinese automaker that failed in its original bid to partner with Saab, as well as a new Swedish electric vehicle company.

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But whether Saab can, in fact, be saved is anything but certain even if someone can field a credible offer.  The problem is that some of the insolvent Swedish maker’s assets are controlled by its former parent, General Motors.  And so far, GM has refused to give permission to any of the deals that might have saved Saab.

By various reports there could be as many as a half-dozen different bidders trying to win over the two court-appointed administrators overseeing the Saab liquidation.

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Court Administrator Wants to Pull Plug on Saab

Maker likely to have only a few days to avoid collapse.

by on Dec.07, 2011

Image By: Len Katz

Saab Chairman Victor Muller has a week to save his company.

Despite repeated reprieves, it appears time finally is about to run out on long-troubled Saab, the automaker’s court-appointed administrator saying it is time to end the company’s reorganization process – a move that would almost certainly put Saab into insolvency.

The announcement by administrator Guy Lofak follows word that General Motors has refused to approve a deal that would allow Saab to sell a major stake to a consortium teaming Chinese automaker Zhejang Lotus Youngman Automobile and a so-far unidentified Chinese bank.  GM, Saab’s former parent, has the right of refusal on any sale and has said it fears that such a deal would result in the transfer of its technologies to the Chinese.

Nonetheless, “We still have five to six days to do it,” a Saab spokesperson said, referring to the likely time it would take for the courts to respond to Lofak’s request.  In the meantime, the near-bankrupt maker intends to continue searching for new partners or for a way to get GM to reverse its objection to a sale.

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The crisis at Saab started even before GM decided to sell the company to the Dutch-based company now known as Swedish Cars, in early 2010.  The U.S. maker, fresh out of its own bankruptcy, had already dismissed Saab’s board and shut down its headquarters assembly plant in Trolhattan, Sweden.  The delay in restarting the plant created a financial shortfall for Saab that, by early 2011 meant it was struggling to pay its bills.

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The End for Saab – Really This Time?

Administrator wants to end reorganization despite additional investment in carmaker.

by on Oct.20, 2011

It's increasingly likely Saab's factory in Trollhattan will never build another 9-5.

Saab’s court-appointed administrator will ask to have the automaker’s voluntary reorganization terminated immediately, a move that could force the liquidation of the long-troubled Swedish brand.

The move comes just hours after a private equity firm in the U.S. agreed to purchase $10 million in stock from Saab parent, Swedish Automobile and make available an additional $60 million loan.  Last week, Chinese investors came up with an estimated $15 million to help keep Saab going with an additional $81 million in bridge loans to follow before month’s end.

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But with bills mounting daily, even as its core assembly plant in Trollhattan, Sweden remains shuttered, administrator Guy Lofalk appears to have concluded that there is no way to turn things around and that a bankruptcy would be the best opportunity to maximize what can be recovered from Saab’s assets.

“Saab Automobile shall contest this application and request for continuation of the voluntary reorganization process,” the maker announced in a terse statement, adding that, “Simultaneously, Saab Automobile shall apply at the court for replacement of Mr. Lofalk as administrator.”

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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.

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Saab Wins Chance to Reorganize

Appeals courts accepts plans.

by on Sep.21, 2011

Image By: Len Katz

Saab boss Victor Muller now has 90 days to get the company's finances in order.

A Swedish appeals court has given Saab what amounts to a reprieve, a chance to raise cash and pull its finances into order rather than plunge into a bankruptcy process many believe would result in the closure of the long-troubled automaker.

The decision for the Court of Appeals for Western Sweden reverses an earlier court decision rejecting Saab’s request for a 90-day window in which it would be protected from creditors that include key parts suppliers as well as more than 3,000 Swedish workers.  The reorganization process is somewhat similar to an abbreviated version of the American Chapter 11 bankruptcy filing.

Saab officials have repeatedly said they eventually plan to pay off all of their outstanding debts in full.  But the cash-starved maker is waiting for two proposed Chinese deals to wend their way through that country’s labyrinthine bureaucracy.  In the meantime, Saab has received a $96 million bridge loan it hopes to apply to some of its bills and operational costs until the alliances with China’s largest auto distributor Pangda, and automaker Zhejiang Youngman Lotus Automobile are approved.

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It does not appear likely, however, that the maker will yet be able to re-open the headquarters assembly plant, in Trollhattan, that has been shuttered since suppliers began a boycott in late March.

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With $96 Mil in Hand, Saab Hopes to Avoid Bankruptcy

But unpaid workers could push maker into insolvency.

by on Sep.13, 2011

Saab's assembly line has been idled since March due to a supplier boycott.

With a $96 million bridge loan in hand, Saab is desperately hoping to keep itself in business, but it may be too late for the struggling Swedish carmaker, its employees asking the courts to push the brand into bankruptcy.

Saab is asking a Swedish appeals court to reverse last week’s decision by a district judge to reject its reorganization plan – a move that, in Sweden, would give it 90 days to work out a way to pay off its bills.  And it owes a lot of folks money, including not just some of its key suppliers but also 3,700 Swedish employees who weren’t paid last month.

After also experiencing delays in their June and July paychecks, two unions have filed for bankruptcy, something workers are permitted to do in Sweden, though “This is not a situation that any member of Unionen wishes to be in,” Cecilia Fahlberg, chairwoman of one of the two unions, insisted after taking Saab to court.

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The move came hours after Saab found ways to raise $96 million through a complicated deal with Specialty Purpose Vehicle, an apparently newly-formed organization that seems to be linked to one of the Chinese companies, Zhejiang Youngman Lotus Automobile, that has been trying to secure permission to purchase a majority stake in Saab.

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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.

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Saab Files for Voluntary Reorganization

"We're not trying to pay pennies on the dollar."

by on Sep.07, 2011

Saab hopes to re-open its plants even while under a court-ordered reorganization.

Facing increasing pressures over unpaid bills Swedish Automobile, the parent of cash-starved Saab, has filed for voluntary reorganization under Swedish law.  The move, a last-ditch attempt to buy time while it raises much-needed funds, is an alternative to a bankruptcy filing that might have led to the collapse of the troubled carmaker.

Effectively a self-managed reorganization, the move is aimed at working out plans to pay worker salaries as well as bills owed Saab suppliers and other vendors.  A senior company official said the 90-day process could also see Saab resume production at its headquarters assembly plant in Trollhattan, Sweden.  That factory has been idled since it was struck by a supplier boycott in late March.

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“This gives us some stability” while efforts are underway to raise some desperately needed cash, Tim Colbeck, President and COO of Saab Cars North America, or SCNA said in an interview with TheDetroitBureau.com.  The reorganization, he noted, only affects Swedish Automobile and some of its key subsidiaries in Sweden.  Sales operations in North America and the U.K., among others, are not directly impacted.

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