Delays in Chinese Loan May Spell the End for Saab ~ Greatest Vehicles

Wednesday, 12 October 2011

Delays in Chinese Loan May Spell the End for Saab

If it were a movie, it would have more sequels than Rocky, Rambo and Mission Impossible all combined together. However, it is not: it is the story of Saab’s survival.

And the latest chapter may very well turn to be the last. According to the Swedish newspaper Svenska Dagbladet, Guy Lofalk, the administrator appointed by the court to oversee Saab’s implementation of its restructuring plan, is ready to stop the process, remove the company’s protection from its creditors and, effectively, declare the carmaker bankrupt.
The reason is Saab hasn’t received the €70 million($ 95.4 million USD) bridge loan promised by Chinese partners Pang Da and Youngman, as it plays a key role to the company’s desperately needed short-term funding.
Lofalk couldn’t be reached while the automaker's owner Victor Muller declined to comment. Saab shares fell by 7.2% this morning, while the automaker’s spokeswoman Gunilla Gustavs said that “We are still expecting the Youngman loan to come in”. She couldn’t clarify when this would happen or how long the company can go on without the loan.
Local court judge Cecilia Tisell told Reuters it is possible that Saab itself, instead of the administrator, will ask the court to remove the protection from its creditors if it comes to the conclusion that the restructuring process will not succeed.
She added, however, that no such request has yet been filed: “No, we have not heard anything like that at all from the Saab companies of Guy Lofalk.”

Could the Swedish government step in and save Saab, paying off its debt to the European Investment Bank and effectively acquire the company, as some reports suggests?
“No, the Debt Office does not have any such mandate”, said Swedish Debt Office spokesman to the newspaper when asked to comment.
No help from the government then. Saab’s last chance may be that the administrator waits at least until Friday, when China’s National Development and Reform Commisssion is expected to rule on the Saab-Pang Da-Youngman loan.
Story References: The Guardian


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