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It seems like there’s more people involved that are interested in saving Saab than there are interested in purchasing their vehicles. Nonetheless, the drama continues to unfold as we reported yesterday that the Bank of China would come to save Saab, but the Chinese firm Pang Da is still expressing interest.
Pang Da is still interested in purchasing at least a part of Saab along with China’s Youngman. Both were originally included in Saab’s plan to sell the brand, but recent reports show that the Bank of China would replace Pang Da as the rescuer. The reason for the switch was believed to be caused by opposition from Saab shareholder, General Motors.
Saab did say that they are still in talks with Youngman and an unnamed bank, but declined to comment on Pang Da’s involvement. But Pang Da reassured the public today that they are still interested in a stake in Saab and that they are still in negotiations with them.
The bright side to all of this? It should be over soon, as Saab’s time is running out with unpaid workers calling for the company’s bankruptcy.
After much back and forth over the past months between Swedish Automaker Saab and Chinese suitors Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co., it seems like funding for Saab is very much back. The Chinese companies have both agreed to buy the Swedish automaker, providing the company with some much needed short and long term liquidity.
The details of Pang Da and Youngman’s agreement are an initial commitment of EUR 50 million to fund Saab Automobile while in reorganization. Next, the Chinese investors will then provide at least another EUR 600 million in funding to restart production and to settle the company’s debts and liabilities, allowing the company to concentrate on matters moving forward.
However, the condition that broke the agreement in the past may cause an interference again. This deal can only become a reality if the Chinese government chooses to give its seal of approval.
According to Saab’s restructuring plan, production will resume in Sweden and Mexico while considerations for assembly in China will be addressed as well. Immediate targets for Saab include the introduction of the 9-4X crossover and the 9-5 SportrCombi wagon. Saab aims to sell up to 55,000 vehicles for the year 2012. In 2010, Saab only managed to move 32,000 vehicles.
Pang Da and Youngman are optimistic that Saab has what it takes to become a profitable company. While 2012 will be a transitional year of reconstruction, the Chinese hope that Saab profitability will return for 2014.
U.S. private equity firm North Street Capital will give Saab a $70 million investment, including an equity stake worth $10 million and a $60 million loan to the ailing car maker.
With Chinese-backed financing looking increasingly unlikely, the investment from North Street Capital, a firm run by auto enthusiast Alex Mascioli, will give Saab the resources it needs to (literally) keep the lights on at their facilities. The Chinese government has yet to approve the bridge loan being offered by both Zhejiang Youngman Lotus Automobile Co and Pang Da, and Saab’s owners fear that full payment will not be received on the October 22nd due date.
[Source: Automotive News]
The administrator in charge of the Saab bankruptcy proceedings has told a Swedish court that the process must stop.
“The money is not enough to continue the reorganization,”said Guy Lofalk in an interview with Reuters. “Now, an application [to terminate the reorganization] has been mailed. It should be on the court’s desk tomorrow.”
Lofalk said that the $70 million investment from North Street Capital was insufficient, and that the two Chinese companies looking to buy Saab have failed to reach an agreement with Saab’s owners.
Saab’s owner, Swedish Automobile, said that it would fight the request and attempt to have Lofalk removed from his position.
[Source: Automotive News]
Saab‘s parent, Swedish Automobile (formerly Spyker Cars), announced that an unnamed Chinese company will purchase 582 Saab cars at a total value of 13 million Euros ($18.4 million) in order to help the automaker pay wages to its employees and part of the money it owes to suppliers.
“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 employee’s wages before the end of this month,” declared Swedish Automobile CEO Victor Muller.
However, with suppliers facing prospects of only getting 10 percent of what they are owed in the short term, there have been calls for Saab to file for voluntary bankruptcy, the European association of automotive suppliers CLEPA, stating this is the only option in order to allow employees to obtain state aid.
In addition, Saab is still struggling to raise money via leasing and by-back of its real estate. According to an official release by Saab Automobiles, Russian businessman Vladimir Antonov is still very much interested in pour money into the ailing automaker, but was awaiting clearance from the Swedish National Debt Office.
Swedish real estate company Hemfosa, was on Saturday, preparing to buy and lease back Saab’s factory in Trollhattan, to help ease the company’s debt , though the deal still hinged on participation from the European Investment Bank as well as Chinese companies Pang Da and Youngman.
Nevertheless these ‘pending’ agreements have done little to quell fears about Saab’s longer term viability, particularly among CLEPA members. The organization’s CEO Lars Holmqvist believes that the Swedish government’s slow response to intervene with the Saab situation and the automaker’s low volume production, along with what he see as ‘pathetic’ last ditched attempts to secure funding, are only postponing the inevitable.
As part of Spyker’s capital-raising efforts for its ailing Saab brand, the Dutch automaker is entering into talks with Chinese automotive company Pang Da, and will have to rename itself as Swedish Automobile N.V. as part of the deal.
In return, Saab will get a $42 million cash payment, ostensibly to help pay Saab’s substantial debts. Saab CEO Victor Muller confirmed the payment, stating ”Pang Da’s advance payment and sales of imported Saab cars are not subject to approval from the NDRC. The first advance payment of EUR 30 million was received last Tuesday.”
Pang Da is expected to pay $91 million for a 23 percent stake in Saab. However, a Bloomberg report claims that China is hoping to slash the size of its auto industry, and government regulators may not give the go-ahead for the transaction, scuttling Saab’s salvation.
Saab has been surrounded by general corporate uncertainty and financial trouble over the last few weeks. The failed deal with China’s Hawtai Motor and Saab’s $100 million payment mishap with its parts suppliers have taken a toll on the Swedish automaker however the company may have a second chance.
Saab announced on Thursday that it has made progress with its 800 suppliers and is confident it will resume production by next week. “What we are aiming at, what is an internal goal here now, is (for production) to be up and running at the end of next week,” Saab production director and purchasing manager Gunnar Brunius said.
Saab has struck a deal with China’s Pang Da, which has agreed to pay the automaker $30 million up front, to get the company moving again. Furthermore, Pang Da will invest another $84 million, if approved by the Chinese government, giving the Chinese distribution firm a 24 percent stake in Saab. However, if the deal fails, Saab will have to repay Pang Da’s initial $30 million investment, which could cripple Saab financially.
[Source: Left Lane News]