Another week and another episode in the Saab drama is upon us. Now news comes that this ailing Swedish brand has halted production on building any new cars until Aug. 9, 2011.
The delay is caused by suppliers, who want Saab to clear its debt with them before they provide any further parts. Saab has just secured an $81.2-million funding so it can produce cars once again.
Saab, which is owned by Dutch and Chinese company Swedish Automobile has said: “Saab Automobile continues its discussions with its suppliers on materials supply and commercial terms and is close to reaching agreements.”
It also commented that some of its suppliers need time to manufacture adequate amounts of parts to supply to Saab, leading to a delay of one month from today.
All these delays are not playing in favor of anyone holding shares in Saab,. Company stock is currently down 0.4% and any further delays can hurt its market value even further.
Saab is doing its best to pull itself out and support its workers. The Swedish automaker recently received a recent cash injection, and the company has finally paid wages to its workforce, some of whom had waited months to get paid. Some of the money it recently raised came from the property sale and leaseback that finally got the approval of the Swedish government.
Due to the nature of their shareholders agreement, any decision made by Saab has to be approved by the Chinese regulatory authorities which include Pangda (a parts distribution company) and Zhejiang Youngman Lotus Automobile Co. It also has to get an approval from the Swedish government, former owner General Motors and the European Investment Bank (EIB).
A 40.1-million deal with a consortium headed by Hemfosa Fastigeheter had already been approved by Sweden’s Debt Office and the EIB.