• Sweden edition
 
SAAB BECOMES CHINESE
'Cautious optimism' over Saab's second escape from bankruptcy

'Cautious optimism' over Saab's second escape from bankruptcy

Published: 28 Oct 2011 21:36 GMT+02:00
Updated: 28 Oct 2011 21:36 GMT+02:00

While the sale of Saab Automobile may have once again helped the troubled Swedish automaker avoid bankruptcy, uncertainties about possible layoffs and obtaining necessary approvals remain, the AFP's Nina Larsson explains.

Beleaguered Saab appears to once again have narrowly avoided bankruptcy, announcing Friday that two Chinese companies will buy it for €100 million ($142 million), making it the second Swedish carmaker after Volvo to take the road to China.

"After the better part of seven months of agony for the company we have come to a point where we can proudly say that we made it," Saab's chief executive Victor Muller, who has been scrambling for months to secure enough funding to keep the company afloat, told a conference call from Amsterdam.

His comments came after Saab's Dutch parent company Swedish Automobile (Swan), also headed by Muller, announced Chinese companies Youngman and Pang Da had agreed to buy the struggling carmaker for €100 million.

The deal, which still requires approval from a long line of interested parties, follows numerous other funding attempts to keep Saab going, including an agreement in July with the same two Chinese companies that earlier this week appeared to have fallen through.

Pang Da and Youngman had agreed to inject €245 million into the company in a deal including joint ventures and about half of Saab's shares; they also agreed to provide €70 million in bridge funding to tide the company over during a three-month restructuring that began in September.

However, late last week, Saab's court-appointed administrator Guy Lofalk applied for the reorganization to be halted -- a move that would effectively have put the company at the mercy of its creditors and likely pushed it quickly into bankruptcy -- deeming that the funding deal had collapsed.

Swan also said Sunday it had terminated the deal since its Chinese partners had failed to provide the agreed funds and had instead offered to purchase all of Saab.

But after deeming the initial undisclosed proposal "unacceptable," Muller said Friday the terms had been dramatically renegotiated and were now favourable, while Lofalk withdrew his petition to abandon the reorganization.

Muller pointed out that Youngman, which will take 60 percent of Saab, and Pang Da, which will take the remaining 40 percent, had agreed to provide long term funding to Saab that was "way in excess of the (€245 million) in the original agreement. It will probably be more like double that amount."

Muller said the two new owners wanted to continue making cars at Saab's factory in Trollhättan in southwestern Sweden, brushing aside concerns over moving production to China.

Saab "will follow, I hope, the example set by Geely with Volvo," he said, referring to the Chinese company that bought Sweden's other famous car brand in August 2010 for $1.5 billion.

"There was a lot of skepticism about that transaction but I think that everybody has seen by now that that scepticism was unjustified," he said.

Swedish Prime Minister Fredrik Reinfeldt welcomed the deal, pointing out to public radio that "it is important to do something to secure the jobs we have worried would disappear from Trollhättan."

Speaking of Youngman and Pang Da, he said they "appear to be strong owners who are working in the world's fastest-growing car market."

Suppliers and unions representing Saab's some 3,700 employees, who are waiting for delayed salary payments for the fourth straight month, also expressed optimism Friday, and several analysts said it was the best and most logical solution to Saab's woes.

Muller acknowledged that the main obstacle would be getting all the necessary approvals -- from the Chinese authorities, the European Investment Bank, the Swedish debt office and Saab's former owner General Motors.

The latter is expected to be the most difficult to get onboard, due to among other things, concerns over its technology going to China.

Muller nonetheless said he thought all the stamps of approval would be secured within a few weeks and that production, which has been halted basically since April, could start up again about two months later.

Swan, formerly known as Spyker, rescued Saab from the brink of bankruptcy early last year when it bought the company from GM for $400 million.

It has been a rocky road since then and suppliers began halting deliveries in April over mountains of unpaid bills.

Muller cautioned some layoffs would likely be necessary going forward and said his own role in Saab's future had yet to be determined.

AFP/The Local (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

08:46 January 6, 2012 by elizabethdy
We can never deny the fact that we are in the midst of the so-called financial crisis. But I guess there is a debt contagion that is widely spreading for we are not the only nation that face this kind of problem. Lots of people really become unemployed for some companies done a massive lay-offs when our economy became unstable.

There is a saying that education is the great key to success. However, there are some college courses that still make their graduates remain unemployed despite earning a certain degree in college. Education is a costly undertaking. When the economy is down, however, deciding if that cost is worth it can be difficult. You can read this article: Doing the math of graduate school costs.

I guess, we should be wise on how we are going to live in times of economic crisis. And for those aiming to earn a degree for college, be sure that it can help you on your journey onwards success.
Today's headlines
Ikea to introduce 'green' vegetarian meatballs

Ikea to introduce 'green' vegetarian meatballs

Swedish furniture giant Ikea is planning to put vegetarian meatballs on the menu in an attempt to cut down on its carbon footprint, the company has announced. READ () »

Students to keep paying off debt beyond 67

Students to keep paying off debt beyond 67

The Swedish government has proposed scrapping the 25-year span for repaying student loans, by suggesting those who attend higher education should keep paying the money back well into retirement. READ () »

Drowned puppies found in crayfish cage
The crayfish cage in the picture is not the one mentioned in the story. Photo: Christine Olsson/TT

Drowned puppies found in crayfish cage

Police in eastern Sweden have launched a preliminary investigation of animal cruelty after two puppies were found drowned in a crayfish cage. READ () »

Three rescued after cruise ship sinks boat
Rickard Rundgren Björk of the coastguard services speaks to the media after the rescue operation on April 19th 2014. Photo: Maja Suslin /TT

Three rescued after cruise ship sinks boat

Three Saturday morning sailors had a lucky escape after their small boat collided and sank after it crashed into a cruise ship whilst sailing in the Stockholm archipelago. READ () »

Missing Swede found alive and well in UK
Sofie Marie Jansson. Photo: Metropolitan Police

Missing Swede found alive and well in UK

British police have found the missing Swedish girl Sofie Jansson in London, exactly a week after she was last seen, with authorities saying she is doing well. READ () »

Social Democrats make tax pledge to elderly

Social Democrats make tax pledge to elderly

Sweden's opposition party has stepped up its efforts to secure the pensioner vote by pledging to lower taxes for the elderly and make higher earners pay more. READ () »

Malmö Nazi attack victim on the mend
Showan Shattak pictured in Malmö before his attack. Photo: Facebook

Malmö Nazi attack victim on the mend

The 25-year-old man, whose stabbing by neo-Nazis sparked mass demonstrations across Sweden, has made a strong recovery in hospital and took to social media to thank supporters for campaigning against fascism. READ () »

Police seeking missing Swede in London

British police have issued a plea for tips in the search to find Swedish national Sofie Marie Jansson who hasn't been seen for almost a week. READ () »

University applications rocket to record high

University applications rocket to record high

Swedish universities continue to draw vast amounts of applicants with the number of prospective students seeking a third level education increasing for the seventh year in a row. READ () »

Man jailed in US over Lars Vilks murder plot
Swedish artist Lars Vilks pictured in New York in 2012. Photo: Linus Sundahl-Djerf/TT

Man jailed in US over Lars Vilks murder plot

American authorities have sentenced a 20-year-old accomplice of 'Jihad Jane' to five years in prison for an attempted terror plot to kill Swedish artist Lars Vilks, after getting involved with the murder plans when he was a teenager. READ () »

RECEIVE OUR NEWSLETTER AND ALERTS
TT
Society
Kids in Victorian garb mark Swedish Easter
Shutterstock
National
Swedish MP ordered chemtrail probe
Society
Swedish supermarket Ica pulls contested Easter commercial off air
Kungahuset
Society
Swedish royals set baptism date for princess
finest.se
Gallery
People-watching April 16
Politics
Who's the prime minister's heir?
Alfie Atkins
Society
Are children's books the key to families integrating in Sweden?
National
'Sweden Dem protests cater to party's martyr image'
National
'Swedish research grants were fantastic, but now it's like Australia'
Society
Only in Sweden: The ten problems you'd never encounter elsewhere
National
Swedes stopped to take my picture, but didn't look me in the eyes
Business & Money
A swipe of the hand replaced cash and cards in Lund
Advertisement:
YouTube
Features
Video: Oliver Gee finds out how to embrace The Swedish Hug
TT
National
Abba duo hints at reunion
Private
National
Flash mobs hug it out across Sweden
Finest.se
Gallery
People-watching April 11-13
TT
Politics
Swedes to give six-hour workday a go
TT
Society
Aussie choir member wows Abba in Sweden
YouTube
Society
Stockholm magic a surprise YouTube hit
Fastighetsbyrån
Society
Gallery: The Local's Property of the Week
Private
Society
Swedes find 200-year-old gravestone in living room
Stockholm School of Economics
Sponsored Article
Why a bachelor's degree is no longer enough
Deepti Vashisht
Features
Deepti Vashisht dissects the magic of Sweden's personal ID number
Shutterstock
Society
Ten signs you've been in Sweden too long
Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Blog Update: The Diplomatic Dispatch

28 October 15:16

The Green Growth Group Summit »

"Today on the 28 October in Brussels, a large group of key EU Ministers and business people, including UK Secretary of State for Energy and Climate Change Edward Davey, and Swedish Environment Minister Lena Ek, will meet to discuss green growth. They all have a stake in resolving a challenge which, although it is crucial..." READ »

722
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com