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Narrowly escaping bankruptcy and liquidation for the 17th time (ok, maybe that’s an exaggeration), Saab has confirmed receipt of a 70 million Euro payment from Chinese investor and automaker Zhejiang Youngman Lotus Automobile Co.
Far from a magic wand that will make all of Saab’s troubles go away, the automaker continues to operate in its restructuring phase, with the funds being used to simply keep the ship afloat during that time. Swedish law doesn’t permit companies to take out new loans during a restructuring phase, a law both Saab and Youngman have managed to avoid by signing an agreement back in September, and now claiming the funds have been available for several weeks.
Saab continues to await further investment by Youngman and Pang Da Automobile Trade Co., both of which are subject to approval by the Chinese government won’t be decided on until October 14th at the earliest. Saab has given no indication of when it hopes to open its Trollhattan assembly plant.
The Saab soap-opera continues, but this week the news is good. Saab just won a court appeal to protect it from creditors while it awaits funding from its Chinese investors.
Earlier this year, two Chinese companies, Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. agreed to buy shares in Saab, totaling $334-million.
Considering Saab currently owes $207-million to its employees and creditors, so once the money is received, it can easily pay down its debt.
The lower-court had initially rejected protection to Saab, citing that it had done so once before in 2009-2010.
How long will it actually be before Saab’s 3600 employees and its creditors will get paid? That is dependent on how quickly its Chinese investors can pay their due.
For now, the court has given Saab some breathing room. Saab’s production line has sadly been at a standstill since April 2011. Let’s hope they can once again start making beautiful and wonderful cars like the original 92 (pictured).
[Source: Automotive News]
The drama involving Saab is on-going and doesn’t seem to show any signs of slowing down.
It seems every time the company starts production, something will cause the production line to stop, whether its money related or parts supply related, and often both.
Saab was hoping to have some stability back in their lives after signing a $110-million deal with Pang Da, a Chinese parts firm, but that wasn’t enough. Now, Zhejiang Youngman Lotus Automobile Co., which is another parts distributing company in China, is taking an equity stake in the company as part of a distribution and manufacturing joint venture.
This new deal is reportedly worth $195-million, and will give Youngman a 45% stake in parts manufacturing in China, while Saab N.V. retains 45% and Pang Da 10%.
Even this deal is still subject to the approval of the Chinese government, so this drama is still far from over. Stay tuned.
Since “All My Children” and “One Life To Live” have been canceled, soap opera fans can turn to Swedish car-firm Saab for their weekly dose of drama.
Saab has seen its fair share of ups and downs in the last year and a half. General Motors almost left it for dead when a take-over deal with Koenigsegg broke down, only to find a last minute savior in the Dutch car company Spyker.
Ever since Spyker took over, Saab has had escalating problems with paying bills and keeping the production line going, with the company on the brink of bankruptcy almost every month.
Now with a new Chinese investing partner (Pangda Automobile Trade Co.), Saab now seems set to begin production once again next week, after a seven-week delay.
While Saab waits for the Chinese authorities to fully approve the Pangda deal, Spyker’s CEO Victor Muller says he is confident Pangda will obtain the necessary approvals to get the deal done.
Saab currently owes $47.2-million to Swedish suppliers, and almost the same amount to foreign suppliers. To say Saab is in a big hole is an understatement.
We hope they can get back on their feet and start producing cars like the iconic Sonnet and the 900 Turbo once again.
[Source: Automotive News]
Saab appears to have yet again found a savior in China, announcing a joint venture with Pangda Automobile Trade Co., the largest distributor of vehicles in the world’s largest car market.
The deal will see Pangda purchase 30 million Euros ($42.5 million) in Saab vehicles, with a second purchase of 15 million Euros ($21 million) to follow. Later on, Pangda will provide 65 million Euros ($92 million) in funding, resulting in a 24 percent equity stake in the Swedish automaker. These investments solve Saab’s cash flow problems for the immediate future and will be enough to get production back on line.
Several other proposals with Chinese partners in the past few weeks have fallen through, reportedly due to a lack of approval by the Chinese government. According to Saab/Spyker CEO Victor Muller, the deal with Pangda should go much more smoothly as it is not a car manufacturer, but a distributor, and therefore the same strict rules do not apply. Last week a deal with China’s Hawtai fell through while rumored talks with another automaker, Great Wall, were later denied.