Three weeks into factory halt, Saab financing still unclear

27th April 2011, Comments 0 comments

Three weeks after Saab shut down its factory, the Swedish carmaker told production staff Wednesday they were not yet needed back at work as it struggles to find the cash to relaunch the assembly lines.

The employees "were given an update on the situation" and told to continue to stay home because "the production line is not able to run normally," spokeswoman Gunilla Gustavs told AFP, explaining Wednesday's staff meeting had been planned since last week.

Swedish Prime Minister Fredrik Reinfeldt and Enterprise Minister Maud Olofsson meanwhile both reiterated Wednesday that the Swedish state did not plan to jump in and save Saab if it is unable to secure the financing it needs to stay afloat.

"We have done as much as we could," Olofsson told news agency TT.

Saab was rescued at the last minute in January 2010 by Spyker, which bought it for 400 million dollars from GM and vowed to preserve the iconic carmaker.

But sales did not reach expectations, losses ballooned, and the company announced on April 6 this year it was stopping production "until further notice" as suppliers have halted deliveries due to unpaid bills.

Spyker has been trying to sell Saab Property -- which includes the company's plant in Trollheattan, western Sweden -- to quickly raise the funds it urgently needed to start up production again.

Last week, the Swedish government gave the green light for the deal, allowing Sweden's National Debt Office to release its security in Saab Property used to guaranteed a 400 million euro EIB loan to Saab.

The government however said the deal still needed approval from the European bank.

Spyker said Tuesday the EIB had imposed new, strict conditions on Saab, its former owner and shareholder General Motors, the Swedish National Debt Office (NDO) and the Swedish government.

"It is not yet certain whether the above parties will be able to fulfil all of the conditions of the EIB and finalise the sale of Saab Property within a short time frame," Spyker said.

Because of the current situation, Spyker and Saab are continuing to work on securing additional funding and possible new partners include "various Chinese car manufacturers," it added in a statement.

"It is now an issue for the EIB and Saab to agree on. As in all banking transactions, the bank and the company have to agree," Olofsson said.

Reinfeldt agreed.

"I have no reason to speculate on what the future holds. But it is absolutely crucial for every company ... to create products and services that are attractive in each respective market. That can only be done by the company itself," he said, adding he was worried for the employees.

Olofsson also mentioned the issue of ownership changes at Saab were being dealt with by the NDO.

Russian billionnaire Vladimir Antonov -- a former Spyker shareholder who was ousted from taking a stake it Saab when Spyker purchased it -- met with the NDO Tuesday about becoming a Saab shareholder.

Antonov is also the investor waiting to purchase Saab Property. He said in March he was ready to invest 50 million euros ($70 million) in Saab and would want to take a 30-percent stake in the company.

At the weekend, his spokesman in Sweden Lars Carlstroem complained to Swedish media that stringent EIB conditions were stalling the financing access.

"I can't see any other explanation than that they want to sink Saab, for Saab to go bankrupt," Carlstroem said, referring to rumoured EIB repayment conditions, including a requirement for Saab to repay the full amount of its loan within 90 days.

In its 20 years as part of GM, Saab never turned a profit

© 2011 AFP

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