Saab hits brakes amid cash crunch

Saab Automobile has the capacity to manufacture and sell more cars, but currently lacks the money it needs to do so.

Saab hits brakes amid cash crunch

“We could increase production in relation to our intake of orders,” said Saab head Jan Åke Jonsson to the Göteborgs-Posten (GP) newspaper.

Saab is now attempting to move along its application for a 4.6 billion kronor ($592 million) loan from the European Investment Bank (EIB) in hopes of getting access to the financing sooner than previously planned.

Otherwise, the company may have to wait until after a meeting of the EIB board on September 22nd before it receives the first installment of the loan.

The bank doesn’t hold a board meeting in August, and it’s unlikely that the EIB will have had time to fully review Saab’s application prior to a meeting of the board in July.

“We’re working with the EIB to see if we can move the decision to July. We haven’t ruled it out. If it doesn’t happen, we have the ability to adjust our operations so that our money lasts,” said Jonsson.

Today, a meager 100 cars a day are produced in Saab’s primary plant in Trollhättan in western Sweden, and without more money, production will likely have to remain at that level.

The Swedish state is also an important party in the EIB negotiations, as Sweden is required by the bank to guarantee the loan. Saab is currently negotiating with Sweden’s National Debt Office (Riksgälden) over the conditions for the state guarantees.

But Saab is also talking with the state about a rescue loan, which would provide the company with financing in the short-term.

The Swedish state has previously set aside 5 billion kronor for short-term loans to the country’s vehicles industry, but has yet to use it.

“We’ve discussed it, but haven’t heard anything so far,” Jonsson told the newspaper.

No additional funding is expected from General Motors (GM), Saab’s previous owner, and in the near-term, Saab’s new owners, the Koenigsegg Group, aren’t expected to provide any funding either.

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Former Swedish Saab bosses appear in court

Swedish car maker Saab's former CEO Jan Åke Jonsson and the firm's former head lawyer Kristina Geers have appeared in court in Vänersborg in west Sweden, accused of falsifying financial documents shortly before the company went bankrupt in 2011.

Former Swedish Saab bosses appear in court
Saab's former CEO Jan Åke Jonsson. Photo: Karin Olander/TT
The pair are accused of falsifying the paperwork at the height of the Swedish company's financial difficulties at the start of the decade.
A third person – who has not been named in the Swedish media – is accused of assisting them by issuing false invoices adding up to a total of 30 million kronor ($3.55m).
According to court documents, the charges relate to the firm's business in Ukraine and the paperwork in question was signed just before former CEO Jan Åke Jonsson resigned.
Both Jonsson and Saab's former head lawyer Kristina Geers have admitted signing the papers but denied knowledge of the Ukranian firm implicated in the case.
All three suspects deny all the charges against them.

Saab's former head lawyer Kristina Geers. Photo:  Björn Larsson Rosvall/TT
Saab filed for bankruptcy at the end of 2011, after teetering on the edge of collapse for nearly two years.
Chief prosecutor Olof Sahlgren told the court in Vänersborg on Wednesday that the alleged crimes took place in March 2011, when Saab was briefly owned by the Dutch company Spyker Cars.
It was eventually bought by National Electric Vehicle Sweden (Nevs), a Chinese-owned company after hundreds of staff lost their jobs.
The car maker, which is based in west Sweden, has struggled to resolve serious financial difficulties by attracting new investors since the takeover.
In October 2014 it announced it had axed 155 workers, close to a third of its workforce.
Since 2000, Saab automobile has had no connection with the defence and aeronautics firm with the same name. It only produces one model today, the electric 9-3 Aero Sedan, mainly targeting the Chinese market.