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Saab secures short term funding, pays wages

AFP/The Local · 29 Jun 2011, 17:17

Published: 29 Jun 2011 17:17 GMT+02:00

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"Swedish Automobile announces that it entered into a 25 million euro convertible bridge loan agreement with Gemini Investment Fund Limited, thereby securing additional short-term funding," the company said in a statement.

The announcement is the third cash injection to Saab this week, for a total of 66 million euros, following a Chinese order on Monday and a deal reached Tuesday to sell and lease back its real estate.

If the funds are paid out as scheduled, "Saab Automobile expects to have secured the liquidity required to restart production hopefully within 2 weeks, subject to reaching agreement with its suppliers which includes feasible delivery schedules," said the brand's Dutch owner, formerly known as Spyker.

The announcement sent Swedish Automobile's shares soaring 44 percent to €1.76 on the Amsterdam stock exchange at 1430 GMT.

Saab has been faced with a mounting liquidity crisis, with the production line stopped as suppliers halted deliveries over unpaid bills.

Last week, it announced it had run out of cash to pay its staff's salary

for the month of June.

"But salaries are now on the way out to all personnel accounts," confirmed Eric Geers, head of information at Saab, to news agency TT on Wednesday afternoon.

"I am relieved to report that we made the June salary payments this afternoon from the proceeds of the sale of cars we announced Monday," Swedish Automobile head Victor Muller, who is also Saab's sole board member, said, apologising to employees.

"We have clearly gone through a very rough patch in the past few weeks and hopefully we can now reach agreement with our suppliers so as to ensure a resumption of our production in a controlled way," he said.

On Thursday there is a scheduled press gathering in Stockholm held by Russian businessman Vladimir Antonov, where he will give his take on Saab's situation.

But according to his Swedish spokesperson Lars Carlström there is no special deal or solution to be discussed at the press conference.

"Everyone seems to want to see him and speak to him. We just want to relieve the pressure a little," Carlström told TT.

Story continues below…

Both suppliers and trade unions have recently voiced the demand that Antonov is allowed to give Saab the cash injection that the disaster-riddled carmaker needs.

Head of union Metall, Stefan Löfven, wants the government to follow the lead of General Motors (GM) in approving Antonov as co-owner.

After GM's dialogue with Antonov they have declared themselves happy with him as a part-owner and financier.

According to TT, GM is now waiting for the Swedish government to do the same, in order for a joint approval of Antonov to be issued.

AFP/The Local (news@thelocal.se)

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Your comments about this article

18:52 July 1, 2011 by Whasaaby
To Saab,

1) Go to a three day work week, save the employees their jobs, keep the line running while lowering your cost, your demand is now down with all the press.

2) Get a darn commercial on T.V. in the United States, brag about the new safety ranking of the 9-5 and show it cutting up the road.

3) Lower the MSRP's, where your making money and so 60% of the dealers stop killing customers on price, while another 40% sell them 3-10K less and are stlll making a profit.

4) Got a owner loyal coupon for 1K via email today (come one, someone that has drove 7 off your cars and owns one now, 1K on a 25-50K car just does not cut it, you need to get aggressive and move some steel.

5) Get as many new 9-5's on the street ASAP, it well help your bruised image when people seen others driving the car.

6) Cut down the custom builds (you don't need those brown and green cars) and load the 4cyl up (we are in a gas crisis) and sell them fast.

7) The rag top always holds it's value, advertise them and do the same as number 6.

Your large areas of sales are New England, Rocky Mountain Region, upper Midwest and California, focus on those metropolitan sales areas and again, move some steel.

8) Great if the plant is running, but if the cars are still sitting on lots (which in the United States they are) what difference does it make? Take the top colors and load them up and move them.

9) Tell your U.S executives to go "undercover boss" and go into some dealerships and see what the buying experience is like versus your other price point competition (maybe you will grasp the problem). My closest dealer after 45 minutes would give me $1K off. I buy one 300 miles away for 5K off over the phone (big problem).

10) Get anyone that likes or drives a Saab a key chain, Saab Coffee Mug, Blanket, etc., and ask them to put the word out, with a cool looking window or bumper sticker for a few months, let your loyal drivers know they are admired. Send them a coupon to get a car near employee discounts to move metal and but all those used Saabs (owners previous model) on the street without the owner taking a hit. Cars on the road sell cars, not production problems.

11) Get some better press people, these articles have zero positive spin and remember to always sell your cars in every press statement.

12) Give me a or Lee Iacocca a call or email, Iacocca will cost you some, but nobody, nobody can sell cars like Lee, I am cheaper and love the brand and know the buyers

Boys in Detroit (Chrysler) know me, in St. Louis, Missouri.

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