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SAAB CASH CRISIS
Saab cash boost after property sale

Saab cash boost after property sale

Published: 28 Jun 2011 08:40 GMT+02:00
Updated: 28 Jun 2011 08:40 GMT+02:00

Saab parent company Swedish Automobile has signed an agreement to sell 50.1 percent of the shares in its property arm for 255 million kronor ($40 million), providing much needed cash for the crisis-hit Swedish car maker.

The buyer of the property has been named as Hemfosa Fastigheter, according to a company statement.

The buyer has the right to increase its stake in the property firm, for the duration of thirty days after completing the deal, bringing the possible purchase price up to 300 million kronor.

Saab Automobile will in due course sign a 15-year leasing agreement with Saab Property.

A further six demands were submitted to the Swedish Enforcement Authority overnight regarding outstanding payments owed by the cash-strapped firm.

The demands range from a couple of thousand up to 1.6 million kronor. The number of cases regarding the firm at the Enforcement Authority currently number 74.

"In total this concerns around 70-75 million kronor," said Fredric Orloff at the Authority.

The largest single demand, around 44 million, is from vehicle components firm IAC.

Swedish Metalworkers' Union (IF Metall) leaders Stefan Löfven and Veli-Pekka Säikkälä are due to arrive at Saab Automobile in Trollhättan on Tuesday.

"We are going to to have a meeting with the union chapter," said Lisa Wernstedt at the union.

She was unable to provide any further detailed information over the schedule for the day.

TT/The Local/pvs (news@thelocal.se)

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Your comments about this article

10:07 June 28, 2011 by byke
I am surprised they were allowed to sell off such assets without getting approval first from those who bailed the out with a loan a few months back.
11:38 June 28, 2011 by spy
Byke

Looking your comments over time I am sure that a lot surprises you about business and the world in general.
16:58 June 28, 2011 by Jasper2
Dear Byke,

Please fasten your seat belt. More surpsises from SAAB (all good) on the way.

Also, if you are feeling faint, please use oxygen mask which will automatically deloy. (smile)
17:47 June 28, 2011 by byke
Well I really hope that Saab is able to pull a rabbit out the hat, but given a history of over 20 years of failing to make a profit, I hope the liquidation of assets doesn't just end up with a delayed bankruptcy which leads to an ever larger bill that the swedish tax payers have to foot for a failed business.

**fingers crossed**
18:33 June 28, 2011 by DaisyCutter
@byke

Nice to see you still feel confident enough to trot out the completely unqualified '20 years of failing to make a profit' line. Saves the rest of us from needing to determine any further the credibilty of your opinions.

Spare us having to explain the circumstances pertaining to that little nugget and go and do some research.
18:52 June 28, 2011 by byke
@DaisyCutter

Rather than throw mud, if you want to refute the statements made, why not use hard evidence showing that Saab has turned a profit for the past 20 years instead.

The only profits Saab has made has been to sell off assets ... but at no point has the company been able to sell enough cars to keep it afloat.
20:26 June 28, 2011 by spy
@byke

I'll think you will find Saab have a history of pulling rabbits from hats.
21:37 June 28, 2011 by DaisyCutter
@byke

Ok, I'll spell this one out because I am in a good mood and so we can all stop dragging this same tired old mud through the house.

It made little financial sense for a multi-national like GM for Saab to turn a profit in Sweden. Best shift their losses to a high taxation country such as Sweden whilst utilising both Saab's engineering and design resources for their own needs. Not to mention the multitude of Saab projects shelved, delayed or cancelled to make way for Opel/Alfa Romeo/Cadillac, etc. Ever wonder why the 9-5 was so late on the scene (even before the '08 events), the softroader 9-3X the last to the softroader ball and why the 9-3 replacement still not with us. If Saab had used even half its available resources and expertise on its own vehicles, who knows what the real profit and loss/sales figures may have been. Not easy to tend to your own chores when you are busy developing ill-fated ventures like the Cadillac BLS on your own budget...

The Saab of today faces a tough challenge ahead for many reasons but a regurgitated, unqualified media quote is not one of them. **Fingers crossed** indeed.
22:48 June 28, 2011 by BillyB
@DaisyCutter

I think you are in a bit of a dreamworld i'm afraid.

Those sound more like excuses than causing factors.

This is the perfect example of the phrases "throwing away good money after bad" or "flogging a dead horse..."

The new deals just delay the inevitable by a few more weeks...
23:08 June 28, 2011 by DaisyCutter
@BillyB

Did I mention anything regarding the current state of play? Did I state any likelihood of future success? No. I simply debunked the oft-quoted line with some hard evidence, as requested. Not everything is as straightforward as it seems.

I shall keep my personal opinion of the future for Saab as I see it for another occasion. Your opinions, whilst not necessarily incorrect are completely irrelevant to the conversation. Back to the paddlesteamer Billy; the boiler's gone out.
10:17 June 29, 2011 by byke
@DaisyCutter

How exactly does your above statement refute that Saab hasn't made a profit from selling cars for the past 20 years?

While other things may have happened in terms of management, the fact still remains that Saab hasn't made a profit in 20 years, doesn't have the sales of 120000 units per year which many believe is needed just to break even or the capital to reach this new dream you talk about.

Again I hope we don't see the Swedish tax payer ending up having to bank roll and loose what so far has clearly been a lost cause. As that's not what Swedish taxes are for.
11:51 June 29, 2011 by DaisyCutter
@byke

My statement does not refute that Saab hasn't made a profit from selling cars for the past 20 years, my statement refutes the use of the fact by punters in reference to the scenario both today and into the future. It's just not relelvant.

Saab may well never turn a profit, but referring Saab's history under GM ownership to Saab now as some kind of barometer holds no water. The outcome may likely be the same but the reasons will be very different.

I don't indulge in dreams and have not put forward anything other than readily available information.

I hope this hair-splitting clarification resolves this matter.
14:18 June 29, 2011 by Nemesis
A lot of the suppliers have not been paid for months. The smaller the supplier, the less likely they have recieved anything. People in some of the smaller suppliers have been laid of, with no hope of contracts restarting.

If any of you can read russion or chinese, just read the Russian and Chinese news outlets. The Kalingrad SAAB factory looks like going ahead, as does a state of the art Chinese factory. With that level of output, Trollhättan will be very surplus to requirements.

The name for this move is asset stripping. Swedish assets are being used to build Russian and Chinese facilities. It looks like that was the end aim regarding the Spyker purchase.

The Swedish government and GM favouring Spyker and its interesting backers, instead of Von Koensegegg should be explained in light of recent developments.

Also a serious look needs to be taken at who actually holds the SAAB automobile patent rights in all this, as asset stripping is clearly taking place.
16:04 June 29, 2011 by Carbarrister
I have owned for Saabs and I hope it continues. Barak Obama notwithstanding Hope is not a strategy.

With regard the following:

"Also a serious look needs to be taken at who actually holds the SAAB automobile patent rights in all this, as asset stripping is clearly taking place"

I am afraid you will find that Saab had very limited patent rights globally. Inventions were too expensive to protect so most of what was invented went into the public domain.

Also, in return for providing a license to GM, Saab received a license back to GM's world-wide patent portfolio. As a result I am not sure the asset stripping claim will withstand much scrutiny.
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