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Saab gears up for June sale

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Saab gears up for June sale
14:46 CEST+02:00
Swedish car maker Saab has twenty prospective buyers, according to documents presented to Vänersborg district court on Monday.

"There are currently more than 20 actively interested parties ... The sale process is expected to be completed during June 2009," the court-appointed administrator of Saab's legal restructuring, Guy Lofalk, said in the document.

Saab launched a restructuring process on February 20th to stave off bankruptcy and become an independent unit after it was dumped by its owner US car maker General Motors.

Saab's creditors were meeting on Monday in the Vänersborg district court on Monday to determine the feasibility of the restructuring process.

About 1,300 creditors had been summoned, but only a handful turned up, Swedish news agency TT reported.

If any of the creditors opposes the restructuring process, the court could decide to halt the procedure based on whether it deems Saab's survival plan realistic.

Should the court find against Saab, the company would either have to declare bankruptcy or find an immediate buyer.

The turnaround plan said Saab aimed to have a positive cash flow by 2011 and was seeking to write off 75 percent of its non-prioritised debt.

Further, it said it needed one billion dollars in financing to survive. A loan of $600 million was currently being negotiated with the European Investment Bank, "following the conclusion of negotiations with the (Swedish) government about state guarantees."

"A further 400 million dollars were expected to be injected from GM," it said.

Lofalk said Saab would build all its cars at its Swedish plant in Trollhättan, with the exception of the 9-4X model in Mexico.

It expected volumes to be lower in 2009 and 2010 than in 2008, when Saab built 93,000 cars, but should make 150,000 cars by 2011, owing to three new models that would be rolled out this year and next.

Lofalk said the life cycle of Saab models had been "far too long."

"Saab aims to have shorter life cycles for its products in the future and thereby have more modern cars" to compete in the European premium segment, he said.

UBS auto analyst Philippe Houchois was pessimistic, however, about the company's future after more than a decade of heavy losses.

"They have restructured their balance sheet so it looks like they can continue operations ... but you don't have a sustainable business," Houchois told AFP.

"It doesn't seem too promising," he said, with the goal of positive cash flow in 2011 unrealistic.

"I am not sure that they can make a platform (economically) viable in just 18 months," he added.

The reorganisation is a Swedish legal process headed by an independent administrator appointed by the court who is working with Saab management.

The process allows parts of Saab to survive and could enable suppliers, who would lose all the money owed them by the company if it filed for bankruptcy, to get some money back by agreeing to accept partial repayment.

GM, which bought 50 percent of Saab in 1990 and acquired the rest 10 years later, has washed its hands of the unit after years of losses, and has called on the Swedish government to step up and rescue it.

But Stockholm has sharply criticised GM's decision to let Saab go, and has repeatedly stated that it will not take over the car maker.

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