Saab Sells Factory, But Sweden and EIB May Be Killing It Off Anyway

Saab has reached a deal to sell 50.1% of its real estate holdings to a consortium led by Hemfosa Fastigheter AB, for about $40m, and has also received an order for $18.4m worth of vehicles from an unnamed Chinese firm according to AN [sub], giving the dead-alive Swedish firm the faintest, cruelest glimmer of hope. The real estate deal was for about a third less than the property had previously been valued at, and still needs to be approved by the Swedish Debt Office, the EIB and GM. Meanwhile, the real struggle is ongoing, as a Saab spokesperson tells Reuters that

Today’s news takes us a good way in the right direction, but it is the agreement (with suppliers) that matters and only then will we be able to communicate a date when we can restart production

But suppliers aren’t even the first in line for Saab’s much-needed cash injection: that goes to workers who are promising to take the company into bankruptcy if they aren’t paid soon. These two recent deals should be enough to pay worker salaries through July, but if suppliers aren’t brought back as well to restart production, the bulk sale and an earlier order from PangDa will never be filled. And those suppliers are currently mulling over an offer of ten percent of what they are owed until the Chinese inject more cash later in the year… not the greatest deal ever. Meanwhile, Saab says

There are other initiatives still being pursued. There is not much we can say about that until we have something concrete to communicate

Like what? What could there possibly be to communicate?

SVD.se reports that GM is increasingly sympathetic to Vladimir Antonov’s case, and that approval of his stake in the firm could come “within days.” But the problem, it seems isn’t GM but the EIB. A rumor reported in SVD.se goes something like this: the EIB “found something” in its research on Antonov, and with Swedish elections coming down the line, the government wants to let the EIB take the fall for “killing” Saab by not giving approval to Antonov. This is very much a rumor, but given how important confidence is in any kind of cash crisis, not to mention the fact that an eventual Antonov investment has been a key confidence builder for struggling Saab, this is shouldn’t be dismissed out of hand. In any case, there’s got to be a reason for the EIB’s continued non-approval of Antonov’s investment, and even if there isn’t, every day that goes by without approval, these rumors will only grow and further undermine confidence in Saab as a going concern. Ironically, the EIB cites Saab’s lack of viability for refusing to pay out further installments of its loan as well, further aggravating the vicious cycle that we call “circling the drain.”

And the problem, ultimately, all comes back to production. Some of Saab’s suppliers, including dashboard contractor IAC, are refusing to go along with Saab’s plans to restart the line next week, saying they are not cooperating with the factory at all. And though dagensarena.se is trying to put political pressure on the Swedish government to force the EIB’s hand and get a deal together, there seems to be relatively little leverage for that argument. After all, Saabs employees aren’t working now, and observers seem to believe that many current employees could keep working even in bankruptcy. How? Give up the building cars thing and become a dedicated engineering and consulting outfit. After all, that strategy has kept even smaller firms (like Lotus) afloat before now…