Saab owner’s losses increase ten-fold

Saab owner's losses increase ten-fold
Swedish Automobile, the owner of troubled carmaker Saab, on Wednesday posted a huge first half loss and said it was still looking for funding to restart production.

Dutch-based Swedish Automobile, formerly known as Spyker, saw its six months to June loss rise nearly ten-fold to 201.5 million euros ($289 million) from 21.9 million for the same period in 2010.

According to an earnings statement, Saab in the second quarter only managed to build 1,989 cars — a 79-percent fall from the 9,497 built in the same period a year ago.

It had been widely expected that the owner of Saab, whose production has been halted for months as suppliers stopped deliveries over unpaid bills, would post disastrous results.

The company has been facing mounting bankruptcy threats and last week hinted bankruptcy protection was one option after it had to delay salary payments for the third month in a row when expected funds from investors failed to come through.

It said Wednesday that “securing additional funding, restarting production and stabilising operations (are a) top priority for management,” but did not indicate when the cash was expected or production could restart.

“It will come as no surprise that this has been an unbelievably tough quarter for this company. Nothing is worse than having to delay salary payments to your loyal employees and they deserve nothing less than my sincere apologies,” Swedish Automobile head Victor Muller said.

“Moreover, our ever tighter financial situation resulted in sustained production stoppages, lost revenues and a significantly increased operating loss,” he said.

He said the company’s business plan was “under review” as it negotiated to obtain more funding.

“We can’t look too far into the future just yet,” he acknowledged.

“We are evaluating all available option in order to secure continuity of Saab Automobile,” he added.

Over the last six months, Saab has signed deals with Chinese distributors Pang Da and Youngman, and entered a deal to sell and lease back its real estate, giving it access to liquidity.

But the cash has not been enough to restart production at its Trollhättan plant in southwestern Sweden and many Saab suppliers have been forced to lay off staff.

Muller rescued iconic Swedish brand Saab from the brink of bankruptcy in early 2010 when his company, then called Spyker, bought it from US giant GM.

The new owner had big ambitions for Saab but the carmaker has since lurched from one cash crisis to another.

At the end of July, Saab had 3,700 employees.

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