Saab owner gets cash to pay wages, some suppliers

ERJ staff report (AN - Reuters)

Amsterdam, Netherlands -- Swedish Automobile, the parent company of ailing carmaker Saab, said today it had obtained enough short-term funding to pay wages to its employees and make partial supplier payments.

Swedish Automobile, until recently called Spyker, said an undisclosed Chinese company had placed an order to purchase 582 Saabs with a total value of 13 million euros ($18.4 million) and that full pre-payment was expected to be received this week.

"I am pleased to announce this agreement, as it secures part of the necessary short-term funding for Saab Automobile and allows us to pay our employees' wages before the end of this month," CEO Victor Muller said in a statement.

"We hope to secure additional short-term funding, necessary to reach agreement with all of our suppliers to restart production, soon," Muller added.

Cash-strapped Saab is scrambling for funds after it said last week it did not have enough money to pay staff, compounding the crisis at the Swedish carmaker, which has halted production for two months as unpaid suppliers stopped delivering parts.

The firm also said today that Russian businessman Vladimir Antonov was still interested to invest in the company, but was awaiting clearance for any potential investment from the Swedish National Debt office.

Real estate lifeline

On Saturday, a newspaper report said Swedish real estate firm Hemfosa is ready to buy and lease back Saab's factory, throwing the crisis-hit carmaker another lifeline.

Saab has been trying to sell and lease back its Trollhatten factory in southern Sweden since April to ease its cash crunch.

Hemfosa CEO Jens Engwall said the real estate consortium backing his firm had everything ready to buy Saab's factory.

Holding up a deal are "the EIB (European Investment Bank) loan and a little money from Pangda and Youngman," he told the Goteborgs Posten.

Newspaper reports have valued the deal at around 300 million Swedish crowns ($46 million).

Saab owes suppliers 300 million to 500 million crowns in addition to wages for its workers.

Neither Engwall nor Saab could be reached for comment.

Saab's longer-term future is tied to funding from Chinese auto firms Zhejiang Youngman Lotus Automobile Co and Pangda, which have agreed to buy stakes in the iconic Swedish brand.

Saab is also reliant in the medium term on receiving regular payouts from the EIB with which it has agreed on a 400 million euro ($566 million) loan. Saab is waiting for the next installment of the loan to be paid.

From Automotive News (A Crain publication)