Saab Faces Scrap Heap as Court considers Fate

[jpd80]

Saab faces scrap heap as court set to rule on future

Greg Roumeliotis and Anna Ringstrom
October 21,2011
Reuters
(Reuters) - Saab moved closer to collapse on Friday as its owner rejected the latest rescue proposal from Chinese investors and its court-appointed administrator said the Swedish carmaker lacked the cash to carry on.

Saab has lurched from one crisis to another since early this year and has not produced a car for months. It was given creditor protection in September -- for the second time in around two years -- owing hundreds of millions of crowns to workers and suppliers.

Salvation was meant to come from investments by Chinese auto firms Zhejiang Youngman Lotus Automobile Co and Pangda Automobile Trade Co (601258.SS), but with this money uncertain to be paid on time or in full, the administrator on Friday asked a court to pull the plug on a reconstruction.

If the court agrees, Saab will almost certainly be declared bankrupt.

"There is no time to find any other solutions, given the company's economic situation," administrator Guy Lofalk said in a letter to the court. "In the current situation, the company is not in a suitable position for reconstruction to continue."

Lofalk's opinion came just hours after an investment firm headed by racing car aficionado Alex Mascioli pledged new cash for Saab, though he conceded his investment was far from enough to tide Saab over until Chinese cash arrives.

Saab has said it will contest Lofalk's request and would try to have him replaced as administrator.

Sounds like Saab's fate is sealed, so sad.......

[mik]

yes it sounds like it`s kaput, i`m wondering if the Chinese investors are purposely dragging their feet hoping to get it for peanuts.

[Bossxr8]

That was a theory I put forward a few weeks ago in the other Saab thread.

Keep dragging Saab along until they go bust and buy the remains cheap. Sly.

[jpd80]

I recall Chinese doing the same with the remains of (?) MG a while back....
I really thought one of GM's partners would jump in, someone like SAIAC..

Since Ford rid themselves of Jaguar, Land Rover and Volvo, they've been going gang busters,
there's something to be said about not buying other brands to fortify your own business.
I wonder how VW will go long term with all those other brands clustered around it...

[Flat Top]

it would be a perfect fit for SAIC

[Flat Top]

sorry SAIAC, so would holden fit well!!! i wonder???

[Bobman]

I miss the Saab-Scania days. Sad indeed.

[aussie muscle]

it's probably for the best. most saab buyers would have moved on to audis by now.

[Yellow_Festiva]

Saab saved by the Chinese...

Beleaguered Saab appears to have once again narrowly avoided bankruptcy, announcing on Friday that two Chinese companies will buy it for 100 million euros ($A132.8 million), making it the second Swedish carmaker, after Volvo, to take the road to China.

"After the better part of seven months of agony for the company, we have come to a point where we can proudly say that we made it," Saab's chief executive, Victor Muller, who has been scrambling for months to secure enough funding to keep the company afloat, told a conference call from Amsterdam.

His comments came after Saab's Dutch parent company, Swedish Automobile (Swan), also headed by Muller, announced Chinese companies Youngman and Pang Da had agreed to buy the struggling carmaker for 100 million euros.

The deal, which requires approval from a long line of interested parties, follows numerous other funding attempts to keep Saab going, including an agreement in July with the same two Chinese companies that earlier this week appeared to have fallen through.

Pang Da and Youngman had agreed to inject 245 million euros into the company in a deal including joint ventures and about half of Saab's shares; they also agreed to provide 70 million euros in bridge funding to tide the company over during a three-month restructuring that began in September.

However, late last week, Saab's court-appointed administrator, Guy Lofalk, applied for the reorganisation to be halted - a move that would effectively have put the company at the mercy of its creditors and likely pushed it quickly into bankruptcy - deeming that the funding deal had collapsed.

Swan also said on Sunday it had terminated the deal since its Chinese partners had failed to provide the agreed funds and had instead offered to purchase all of Saab.

But after deeming the initial undisclosed proposal "unacceptable", Muller said Friday the terms had been dramatically renegotiated and were now favourable, while Lofalk withdrew his petition to abandon the reorganisation.

Muller pointed out that Youngman, which will take 60 per cent of Saab, and Pang Da, which will take the remaining 40 per cent, had agreed to provide long term funding to Saab that was "way in excess of the (245 million euros) in the original agreement. It will probably be more like double that amount."

Muller said the two new owners wanted to continue making cars at Saab's factory in Trollhaettan in southwestern Sweden, brushing aside concerns over moving production to China.

Saab "will follow, I hope, the example set by Geely with Volvo," he said, referring to the Chinese company that bought Sweden's other famous car brand in August 2010 for $US1.5 billion.

"There was a lot of skepticism about that transaction, but I think that everybody has seen by now that that scepticism was unjustified," he said.

Swedish Prime Minister Fredrik Reinfeldt welcomed the deal, saying on public radio: "It is important to do something to secure the jobs we have worried would disappear from Trollhaettan."

Speaking of Youngman and Pang Da, he said they "appear to be strong owners who are working in the world's fastest-growing car market."

Suppliers and unions representing Saab's some 3700 employees, who are waiting for delayed salary payments for the fourth straight month, also expressed optimism on Friday, and several analysts said it was the best and most logical solution to Saab's woes.

Muller acknowledged the main obstacle would be getting the necessary approvals - from the Chinese authorities, the European Investment Bank, the Swedish debt office and Saab's former owner, General Motors.

The latter is expected to be the most difficult to get onboard due to, among other things, concerns over its technology going to China.

Muller nonetheless said he thought all the stamps of approval would be secured within a few weeks and that production, which has been halted basically since April, could start up again in two months.

Swan, formerly known as Spyker, rescued Saab from the brink of bankruptcy early last year when it bought the company from GM for $US400 million.

It has been a rocky road since then and suppliers began halting deliveries in April over mountains of unpaid bills.

Muller cautioned some layoffs would likely be necessary and said his own role in Saab's future had yet to be determined.

http://finance.ninemsn.com.au/newsbu...nkruptcy-again

[kaniSS]

I'm so sick of these articles every month. I wish Saab would just cave in and declare bankrupt already.

I am being harsh but their slow and painful demise is annoying.

[new2ford]

Originally Posted by jpd80

I wonder how VW will go long term with all those other brands clustered around it...

Very well with Skoda. It produces 10% of VAG's cars but around 20% of its profit in 2010.

http://au.finance.yahoo.com/news/Sko...40840.html?x=0
http://www.thetruthaboutcars.com/201...oda-conundrum/

VAG does indeed have an issue there - Skoda has turned from VAG's bargain brand into its quality brand, overshadowing the parent product! VAG is very successful, I hope they play it carefully so they don't become another GM.

[stevefreestyle]

28/10/11 http://www.caradvice.com.au/143611/s...id-bankruptcy/

Saab has made what could be a final plea to avoid bankruptcy as it waits for investment deals to come through from Chinese companies Pang Da and Youngman.

The company was given until 11am yesterday to hand in its response to Guy Lofalk, who applied to have courts lift the Saab bankruptcy protection after he saw no possibility of Saab making a successful reorganisation.

Saab failed to make the 11am deadline, only just handing in its statement plea before 4pm when the court closed.

Saab owner, Swedish Automobile, asked Swedish courts to hold off for a few more days, saying that it is in “intense final negotiations” with investors. The company said in a statement,

“The final result of these negotiations, which can come more or less anytime, are conclusive for Saab’s ability to take a stance on the question that the court has asked Saab to comment on. Thus, Saab cannot, until the result is known, make any remarks.”

Meanwhile, Saab’s press officer, Gunilla Gustavs, recently said,

“Just a few minutes before four o’clock, we sent a statement to the court that basically says ‘we recognise that we were given an opportunity to file an opinion. We have not done that because we were at the final negotiation stage with our financial investors’.”

A final decision from the court is set to be finalised today (local time), however, it’s almost anyone’s guess as to what will actually result.

[Bossxr8]

Probably just another stalling tactic from the Chinese.

[jpd80]

Originally Posted by Bossxr8

Probably just another stalling tactic from the Chinese.

Nah, they just waited until bankruptcy was inevitable and there was no escape for Saab before swooping in...

[Pedro]

Yep, like Volvo, that's another brand gone to the Chinese.
At least the Chinese have kept both of them manufacturing in Sweden .... up to now. Watch this space.