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In yet another twist to the ongoing Saab soap opera, the Swedish automaker has received a payment from Zhejiang Youngman Lotus Automobile as it struggles to stay solvent. The payment, which is some $5 million will be reportedly be used to cover outstanding tax expenses.
Following on from that, Youngman, which is looking to take a significant stake in Saab, apparently plans to pay out more money by the end of this week, (some 20 million euros/$26.4 million), in this case to cover unpaid salaries. A spokesman for Saab, Eric Geers, confirmed that while the first payment had been received, nothing else could be confirmed, except the fact that talks with Youngman are “ongoing.”
Saab has been struggling to stay afloat ever since it was purchased from General Motors by Spyker and it’s main assembly plant in Trolhattan, Sweden, is currently idled in the wake of unpaid bills. In recent months the firm, owned by Swedish Automobile has sought creditor protection as it looks to find suitable investors.
Youngman has repeatedly tried to buy into Saab, but the latest deal was vetoed by General Motors, which still owns licenses for Saab technology. In the meantime Saab, still under creditor protection is under increasing pressure by the administrator overseeing the process, to have it’s protection agreement terminated.
A distric court in western Sweden, has given the automaker and its creditors, until Thursday this week to submit their views regarding the matter. A final decision on Saab’s status is expected to be made on December 16th.
Saab’s sob story saga might be coming to an end, though the information surrounding their pending acquisition is murky at best.
Rumors swirled quickly around the media yesterday that the Bank of China, fourth-largest by market value had planned to acquire just under 50 percent of the company. Those reports are now being corrected— it’s a bank in China, but not the Bank of China. Regardless, this investment could be the savior Saab prayed for after GM flatly rejected their previous partnership with Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co.
Pang Da operates dealerships in China, while Youngman manufactures Chinese vehicles under the Lotus brand.
According to GM, that partnership would jeopardize their own interests in China because they supply both parts and the 9-4X crossover, which would then be unfairly accessible to the Chinese companies.
Saab hopes the new deal will keep GM satisfied while allowing them to finally be rid of their debt, which includes unpaid salaries and bills.
“The discussions include a short term solution to enable Saab Automobile to pay November wages and continue reorganization. The outcome of the discussions is still uncertain,” Saab said to Automotive News.
Saab parent company Swedish Automobile originally hoped for Pang Da and Youngman to take a combined 53.9 percent share of Swedish Automobile, but nothing in Saab. The two companies pushed instead for full ownership of Saab.
Gallery: Saab 9-4X
[Source: Automotive News]
General Motors has announced that it will cut ties with Saab over its pending sale to two Chinese automakers. The threat has some very real consequences with GM stating it would cease manufacturing of the 9-4X crossover for Saab, as well as stop delivery of the parts it currently supplies the Swedish automaker with.
“Although General Motors is open to the continued supply of powertrains and other components to Saab under appropriate terms and conditions, G.M. will not agree to the continuation of the existing technology licenses or the continued supply of 9-4X vehicles to Saab following the proposed change in ownership as it would not be in the best interests of G.M. shareholders,” said Jim Cain, a General Motors spokesman in an interview with Reuters.
GM owned Saab until last year, selling it to Dutch exotic car maker Spyker, remaining connected despite the changed ownership. Money problems have plagued Saab since, bringing it to the brink of bankruptcy over the summer. A series of deals meant to save the company fell through, until current owner Swedish Automobile decided to sell Saab to Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade.
Therein lies the problem for GM, which objects to supplying its technology to Chinese companies and potentially threatening its sales in China and other markets. Monday’s announcement represents a hardened position compared to their Friday announcement suggesting the sale would be difficult to back.
Don’t forget that there haven’t been any final decisions made yet, Swedish Automobile said they will discuss the sale with G.M. before moving forward.
“I expect this to happen tomorrow. There are always alternatives but we only have limited time,” the chief executive of Swedish Automobile, Victor R. Muller, told Reuters in a text message.
[Source: The New York Times]
Debt ridden Saab is to apply for court protection from its creditors in a bid to stave off bankruptcy get again. For months, the automaker has struggled to raise finances to pay off suppliers, and as a result, has halted production. Saab was rescued from bankruptcy last year by Dutch owner, Swedish Automobile (formerly Spyker), as former owner General Motors prepared to shut the company down
Saab has declined to comment on the issue but, spokeswoman Gunilla Gustavs said that the company is continuing to work on raising the necessary funds. The Swedish automaker’s most recent statement said, ” Saab Automobile AB is now working on other options to secure bridge funding which would allow us to stabilize operations, finalize negotiations with suppliers on payment and delivery terms and restart production”.
If Saab obtains a court creditor protection order, it would place the company into a process of corporate restructuring. Under this process, which Saab entered in 2009 after GM made clear its intention to cease funding the company and exited later that year, the company is granted temporary protection from creditors while an administrator and management seeks to restructure the company into a viable business.
[Source: Automotive News]