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Saab CEO rebuffed Chinese purchase bid

AFP/The Local · 21 Oct 2011, 14:44

Published: 21 Oct 2011 14:44 GMT+02:00

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"The Chinese parties no longer wish to cooperate with Saab Automobile's (Dutch) parent company Swedish Automobile. (They) instead want to invest directly in Saab Automobile and thereby take over all ownership in Saab," said the carmaker's court-appointed administrator Guy Lofalk.

Swedish Automobile (SWAN) confirmed in a statement Friday that its Chinese partners Pang Da and Youngman, which had agreed to inject €245 million ($335 million) into Saab in exchange for about half the carmaker, had now offered to buy the whole company.

"SWAN declined the offer," it said in a statement, adding it had "requested confirmation from Pang Da and Youngman that they are able and willing to consummate the (signed) agreements... That confirmation has not been received to date."

In a filing Friday to the Vänersborg district court in southwestern Sweden, Lofalk meanwhile said he did not think Saab would get the needed funds and he therefore no longer thought the company's three-month reorganisation under bankruptcy protection would be successful.

"It is my duty as administrator to apply for the reorganisation to cease," he wrote.

If the court grants his petition, thousands of individual requests from employees and suppliers for Saab to be declared bankrupt, which have been put on ice during the reorganisation, will be reactivated.

The company's charismatic chief executive Victor Muller had convinced a Swedish appeals court last month it would be possible for Saab to land on its feet if it could just keep its creditors at bay until the cash from Pang Da and Youngman came through.

The company, which at the time said it had about 150 million euros in outstanding debt, said it expected that cash injection in November and that in the meantime it would get a 70-million-euro bridge loan from the two Chinese companies to help keep it afloat.

Lofalk pointed out that the bridge financing had not come through, significantly delaying the restructuring work.

During two trips to China, he said he had understood that SWAN and the two Chinese investors did not see eye-to-eye on where the deal was headed.

"There is no time to find other solutions due to (Saab's) financial situation. (It) is not in the current situation in a position suitable for continued reorganisation," he said.

Late Thursday Muller told Swedish local radio station P4 Väst he was "disappointed" with Lofalk, who he accused of secretly meeting with Youngman and Pang Da and pursuing his own agenda aimed at pushing Saab into new


Story continues below…

SWAN said it had been given until October 27 to respond to Lofalk's request, saying it would contest it and demand a new administrator.

The court has informed the company that it will rule on the issue on October 28, SWAN said.

The company meanwhile insisted the new developments did not alter its announcement Thursday that it had secured funding from US private equity firm North Street Capital, which is set to buy $10 million in shares and provide a loan of $60 million by the middle of next week.

SWAN however said that due to the new developments, it would delay reporting its third quarter results by nearly a month to November 30, instead of October 28 as previously planned.

AFP/The Local (news@thelocal.se)

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Your comments about this article

17:48 October 21, 2011 by McChatter
Let's get this straight. Saab has € 150 outstanding debts. The Chinese were prepared to loan € 70 million. The Americans can cough up $ 70 million (= € 50 million). That still leaves a gap of € 30 million. Who's filling that?

This is typical of Victor Muller. Gets himself into a mess and it's always someone else's fault. It's been the same old story right from the start when he eased himself into Spijker Cars and then dumped his fellow-directors. Now he gives Lofalk the blame because nowadays Muller has no fellow board-members who can carrry the can. The share price of Spijker Cars today dropped 8,24% (from € 0,85) to € 0,78). Investing in Greece sounds better to me. Still, shame for Saab. They did make good cars.
17:56 October 21, 2011 by derek hughes-beddows
let the chinese have it...at least it stays saab
23:44 October 21, 2011 by Just_Kidding
You don't have money,

You promise and don't deliver....

But you must remain the chief and the owner....

Give me a break!!!
21:27 October 23, 2011 by Shawntooth
the chinese are interested in SAAB but not muller.....so go figure.....
17:20 October 24, 2011 by axial
Despite VM shortcomings as CEO, you have understand the manner in which China and the Chinese conduct business. They smell blood so to speak, their intent was never to actually consummate this deal. They in turn eliminated any other competing bids by promising an outstanding deal for SAAB. Now that the process has been fatigued, they pull out, thus ostensibly forcing SAAB into bankruptcy and thus being able to "pick up" SAAB for pennies on the Euro!

This is their MO! Just review the deals they made during the financial crisis and how they proceeded to purchase other foreign automakers. SAAB's primary mistake was their business plan and future auto development. SAAB could have been easily saved, yet VM is not the man to do it.
23:07 October 24, 2011 by Just_Kidding
2axial: Accept it or not, SAAB is not interesting to anybody other than blood thirsty Chinese. I wish some rich attractive young nice fairy lady was willing to keep SAAB alive, unfortunately she is nowhere to be seen, and it seems that one should choose between a SAAB with ugly old blood thirsty Chinese businessmen or no SAAB.
03:34 October 25, 2011 by Shawntooth
yea keep demonizing the chinese lol.....as delusional as you sound, pangda and youngman have provided respectively 58 million and 70 million euros cash as pre-order and loan, so SAAB's bankruptcy risk has become a serious liability to the chinese.....with the SWAN's bureaucracy, it's likely that they won't approve 100% equity sale, so there's really no interest for chinese to inject more loans (plus which bank is gonna finance them to give money to such a hot mess unless you can't completely own it and turn the biz around)......so it's not just chinese, whomever is in negotiation with such a mess will execute the same way at this point
17:50 October 25, 2011 by axial
Shawntooth, the only delusional aspect here is your inability to understand business or the manner in which some conduct it. That is alright, that is why we are here, to educate you and help you through the hot mess that is your mind and drivel laden logic.

Funds never exchanged hands, m o r o n, and the what you deem as a "pre-order" loan also ensured that they receive the architecture to the previous generation 9-3. Get your facts straight or leave this discussion to adults. No one is demonising the Chinese! Merely illustrating their general MO. Nothing wrong with it, it is shrewd, yet as I and others pointed out, the real issue here is Viktor Mueller. A rather unscrupulous bloke with a silver tongue. They used be called charlatans, now they are entrepreneurs.
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