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When sports car company Lotus had announced the end of its title sponsorship of the Lotus F1 team, a red flag was raised as concerns over Group Lotus’ financial problems surfaced. Now, new reports reveal that the troubles facing the automaker are more than meets the eye.
Earlier warning signs were brought to attention this year when Lotus’ Malaysian parent company Proton sold a controlling stake to another Malaysian conglomerate, DRB-Hicom. As per Malaysian law, Lotus had to halt all business operations and freeze its financial accounts during the 60-day transition period.
The 60-day period ended in March and now, new owner DRB-Hicom is currently conducting the due diligence of Group Lotus, investigating worrisome figures including Lotus’ $320 million in accumulated debt.
Due to the mounting concerns, rumors have spread that Lotus may be put into administration to free itself from debt and that even CEO Dany Bahar has been let go from the company. What’s more, in line with our reports earlier this year, Chinese automaker Zhejian Youngman Lotus Automobile (Youngman) is a potential buyer of the brand, placing a bid on its remaining assets, including naming rights. The official importer of Proton and Lotus cars in China, Youngman is perhaps better known for its past failed attempt to purchase the now defunct Saab.
So far, a Lotus spokesperson has denied these rumors and insisted that DRB-Hicom and Lotus executives are working to keep the business running as usual, ”There have been and continue to be positive discussions between Group Lotus senior management and senior management at DRB-Hicom both here in Hethel and in Malaysia. Despite various rumours in the media to the contrary, at no point has DRB-Hicom indicated to Group Lotus that they intend to put the company into administration and we welcome the opportunity to put that rumour along with incorrect speculation that production has stopped, that Dany Bahar is no longer CEO and that we are no longer involved in F1 to bed.”
The spokesperson adds, “It’s no secret that we are going through a very difficult time at the moment due to the change in ownership but we’re doing everything we can to get through this period and come out the other side stronger than before.”
Optimistic words, but something definitely isn’t right in the house of Lotus. Stay tuned for more information as the situation continues to develop.
Just about 100 more Saabs will roll off the line after the Swedish automaker decided to send some employees back to finish incomplete units still standing in the factory.
The company was plagued with financial problems after changing hands from GM to Spyker Cars and ultimately Swedish Automobile. That forced them to shut down despite attempted rescue investments by Chinese companies, Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. Unfortunately for Saab, GM, which manufactured the 9-4x crossover, said the move would unfairly share their technology in key markets and subsequently blocked it.
For now, new Saabs can still be seen on the road, and the company’s North American operation is trying to find a way to honor existing warranties, but the brand will soon be little more than an automotive relic.
Despite being officially declared bankrupt, Saab still has organizations willing to snap up the remnants, as the former Swedish carmaker goes into liquidation.
It’s probably not surprising, but considering the money it’s already put out to try and save Saab, China’s Zhejiang Youngman Lotus Automobile Co. Ltd, is still interested in acquiring what assets it can, which, according to a spokesman, primarily concerns the Phoenix platform which would have formed the basis for the next generation 9-3, along with other technologies that didn’t hinge on General Motors (part of the reason for Saab’s bankruptcy was GM’s refusal to allow Youngman to acquire the brand, fearing technologies it had invested with the Swedish automaker could end up in Swedish hands).
Yet another suitor comes in the form of the Turkish government. While it is very unlikely Turkey would want to build Saabs per se, the country already boasts a number of assembly plants belonging to foreign automakers, but until now hasn’t had a real domestic brand. If the government is able to acquire Saab assets, including the much valued Phoenix platform, then the Saab 9-3 might live on after all, though under a different name.
Given the twists and turns that have occurred with Saab since its independence from GM, what happens next at this point is anybody’s guess.
[Source: Left Lane News]
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 has officially been struggling for two whole years now, since its problems first came to light in December, 2009.
With time, it has seen some positive developments, but things don’t look any better for the foreseeable future.
A few months ago, Saab had received a court order that prevented its creditors to push the company into bankruptcy. It would use this time to reorganize. However, Saab’s owner – Swedish Automobiles NV, has said that Saab and its creditors have just five to six days to submit their views to the district court in Sweden. The court will decide whether to end the reorganization and push the company into bankruptcy.
Despite attracting two major Chinese companies (Pang Da Automobile Trade Co. & Zhejiang Youngman Lotus Automobiles) to invest in Saab, there have been delays in getting the necessary payments from the Chinese, and production lines have been sitting still for almost an entire year.
Saab previous owner, General Motors also has some objections. Most of the technologies found in current Saab vehicles is licensed from GM, and it does not want to support a sale of Saab that could hurt its own position in China.
GM currently builds the 9-4X for Saab in Mexico. If GM pulls the plug on their deal with Saab, it would be impossible for the company to survive in its current form.
Stay tuned, as this drama is far from over just yet.
[Source: Automotive News]
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]
Although Saab has been struggling for the past year, don’t bet against it. All but doomed when GM sought to stop Saab’s deal with the Chinese Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co., Youngman is now proposing a new deal with Bank of China, the country’s fourth largest bank by market value.
The deal with Bank of China, which replaces Pang Da, will allow the bank to own just under 50 percent of Saab. As GM threatened to halt the assembly of the Saab 9-4X crossover as well as halting the supply of components and technology if Youngman and Pang Da succeeded their acquisition bid, the substitution of Bank of China should help pave the way for Saab’s acquisition approval.
Currently, Saab is under court protection from Swedish creditors as its plant has not produced a car in months due to unpaid salaries and bills.
GALLERY: Saab 9-4X
Saab‘s matchmaking saga is the stuff of cinema. Facing compounding financial dilemmas and a series of unsuccessful talks with a number of investors, the troubled Swedish automaker had little going for it. Just as Saab was close to finally making a deal with its Chinese investors, Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co., the company faces yet another challenge that may prevent the deal from happening.
General Motors Co., the former owner of Saab, is looking to prevent the Chinese acquisition. GM spokeswoman Renee Rashid-Merem claims, “GM would not be able to support a change in the ownership of Saab which could negatively impact GM’s existing relationships in China or otherwise adversely affect GM’s interests worldwide.”
Removing Saab during its 2009 bankruptcy restructuring, GM still owns the technology that Saab uses to produce two of its models. Also, GM has built the 9-4X in Mexico for Saab this year. If bought by Pang Da Automobiles and Youngman Lotus, GM is concerned for the intellectual property that is licensed to Saab.
As roadblocks mount, it is becoming clear that time is running out for Saab. The Swedish brand sold 49,000 units in the United States in 2003 and have now dropped to only 5,800 models sold for 2010 nearly a 90-percent decrease. Through October, only 4,984 units have been sold in the United States so far this year.
[source: Detroit News]
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.
It’s been a leaky autumn so far in the motoring universe. Supposed actual pictures and specs have been “leaked” on Toyota’s upcoming FT-86 coupe (FR-S to us in North America); as well as details on Honda’s new generation CR-V crossover.
Now, Saab has joined the fold, with a picture uncovered by Swedish website SVD Näringsliv, which reportedly shows the next 9-3. The image was originally part of a presentation which Saab gave to the European Investment Bank last year as it made attempts to remain financially afloat.
Now that Da Pang and Youngman have agreed to buy the Swedish Automaker lock, stock and barrel (for a price of 100 million euros/$142 million U.S.), Saab can now get on with what it does best, namely making quirky cars.
Although the Chinese government has yet to give it’s approval stamp, it appears things are moving forward. Production at Saab’s plant in Trollhattan, is rumored to restart in the next several weeks and a number of new models are apparently in the pipeline, including an updated 9-3, which will reportedly come in fastback (which the sketch above illustrates) and convertible variants. Other planned models include an entry level 9-1 and possibly an executive express (9-6 or 9-8 anyone?).
Although some might say that the Saab-China deal wasn’t agreed under the best of terms (Saab’s owner Swedish Automobile was under intense pressure to get a major lifeline, or else bankruptcy protection would end), there are others that are glad one of the world’s most interesting and alternative car manufacturers is still around.
It’ll be interesting to see if under Chinese stewardship; the blasted brand can finally make some money. Time will no doubt tell.
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]
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.
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.