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Saab future in doubt after Chinese fall out

AFP/The Local · 13 May 2011, 07:50

Published: 13 May 2011 07:50 GMT+02:00

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The latest setback casts further doubts over the Dutch-Swedish consortium's efforts to secure long-term funding to rescue the struggling carmarker, an analyst said.

The bailout partnership worth e150 million in cash from Chinese firm Hawtai Motor Group needed to get Saab's production line restarted disappeared as suddenly as it had emerged.

Saab and its Dutch owner Spyker announced that the deal, agreed only last week, was off "with immediate effect" because Hawtai Motor Group had been unable to obtain approvals needed for it go through.

Saab spokeswoman Gunilla Gustavs voiced disappointment, saying that Saab continued to look for other partners in China.

"It's fair to say that it is disappointing," she told AFP in Stockholm.

"The work continues to secure short and medium term funding," she said adding "it (Saab) is open to both continued dialogue with Hawtai and with others, including Chinese partners."

She declined to comment on whether the collapse of the deal was linked to comments by Sweden's top diplomat in Beijing last week.

On Friday, Hawtai defended itself against claims reportedly made by Swedish ambassador Lars Freden that raised doubts about its ability to salvage Saab.

"I have no information on that," Gustavs said when asked about Freden's comments.

Swedish Prime Minister Fredrik Reinfeldt on Thursday stressed that although worried, the Swedish government would not come to Saab's rescue.

"It is the owners and the management of Saab that must take this forward and find long-term financing."

"We in the government have done all we could to facilitate the process," Reinfeldt told reporters in the western city of Gothenburg, near Saab's factory in Trollhättan.

Spyker, a small auto firm, said in a press release: "Spyker announces today that Hawtai Motor Group Company Limited and Spyker terminated the agreement by and between Hawtai, Spyker and Saab Automobile with respect to funding and (a) strategic partnership."

Announced on May 3, the Hawtai deal was to inject into Saab €120 million ($170.6 million) from the Chinese carmaker in return for a stake of up to 29.9 percent in Spyker, and a further 30 million euros in the form of a convertible loan.

It was seen as a last-minute lifeline for Saab, where production stopped on April 6th "until further notice" because unpaid suppliers had halted deliveries.

Spyker itself had rescued Saab in January 2010, buying it from the US giant GM, then in serious financial difficulties, for $400 million.

Story continues below…

Spyker had great plans for Saab, a company that did not turn a profit for 20 years under GM.

The Hawtai deal was subject to approval and conditions including consent from Chinese government agencies, the European Investment Bank (EIB) and the Swedish National Debt office (Riksgälden).

"Hawtai was subject to definitive transaction documentation and certain conditions which included the consent from stakeholders," Spyker said.

"Since it became clear that Hawtai was not able to obtain all necessary consents, the parties were forced to terminate the agreement with Saab Automobile and Spyker with immediate effect."

The latest setback cast doubt over ongoing funding of the company, said HIS Global Insight automotive analyst Ian Fletcher.

"It should not be a surprise that the situation has changed already, given the murmurings surrounding the deal," he said.

Other potential investors waiting in the wings "will need to jump through the same hurdles," he said.

AFP/The Local (news@thelocal.se)

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Your comments about this article

09:11 May 13, 2011 by TheOriginalBlackMan
Huge fail!!
12:27 May 13, 2011 by Eagle63
What many in Sweden (and their government!) don't realize is that a huge part of Swedish 'prestige' is on the line here; Saab was a huge showcase of Swedish automibile know-how (one of the best in the world) and could surely become a leader once again IF given the chance to do so.

But unfortunately the Swedes, although an intelligent 'species' do not seem to be able to defend and be proud of their own icons, so when the going gets tough they tend to just abandon or denigrate their own products and achievements.

I've seen this attribute before in Sweden, especially in politics. It stands in contrast with for example Canada, where there is much support for their country's achievements...
03:37 May 14, 2011 by repat_xpat
@ I found Swede's to be the most prideful people of all nationalities that I have meet, including German and American. The difference is that while a Swede knows he is the best, he will never say so. External humility, internal pride.

Interesting that the article ends saying that SAAB could not agree to the required concessions. Will they die rather than submit? Thus was certainly the case when GM owned them.
11:30 May 15, 2011 by Marc the Texan
That's what happens when you bet on China.
12:38 May 15, 2011 by TheOriginalBlackMan
False pride is rampant in Europe and is a cornerstone characteristic of the so called "white" mind; over compensation, denying and lying about their feelings of inadequacy when in the presence of people who can produce color; denying the Chinese the ability to outright by SAAB; a failed brand but known brand that may be resurrected under Chinese leadership. Indeed, SAAB under Chinese leadership wouldl allow the company to tap into one of the worlds largest markets.

Nonetheless, Europe's deterioration continues; African's, so called Arabs, the so called Chinese, and other people, who produce color (melanin) in smaller quantities, are taking back their lands, resources and refuse to be exploited by so called "white' people. What will Europe do? Europe is people poor, resource poor and morally bankrupt?

Notwithstanding, I must admit Sweden is a quaint country, although truly feminized, but watch out! America's hegemony is clearly at an end and without the American military doing all the dirty work for so called 'white' people, Sweden may return to its Nazi ways and we all know how that turned out.
17:34 May 15, 2011 by Rick Methven

The meds are clearly not working, you should get the doctor to prescribe something stronger.
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