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Saab Leaving Most Debts Unpaid

Only a select few likely to get cash back.

by on Apr.12, 2012

Among the assets of the now insolvent Saab: the Phoenix Concept car, (Photo by Len Katz).

The factory in Trollhattan stands idle but the bookkeepers and bankruptcy attorneys have been keeping busy in recent weeks trying to tally up the debts owed by the now-insolvent Saab Automobile and compare that to the company’s few remaining assets.

The math doesn’t work out well for those Saab owed money to.  The final balance sheet shows assets of $532 million (3.6 billion Swedish kronor) but debts of $1.9 billion (13 billion kronor).  It is possible that the tally will look more favorable, however, if the trustees overseeing Saab’s bankruptcy are able to find a buyer – with as many as seven bidders reportedly looking closely at the company.

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Nonetheless, the bottom line isn’t a good one: a lot of folks looking to recover money from the doomed maker are likely to wind up with nothing.  Among those least likely to come out whole are Saab’s Swedish employees.  They actually pressed for the bankruptcy filing in hopes of recovering months of back pay.  Those workers are owed $89 million.

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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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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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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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