Swedish Automobile NV, the artist formerly known as Spyker, and owner of struggling Swedish car maker Saab, said today it plans to issue new shares to raise cash in order to meet overdue payroll. Response of the union: “Show me the money.”
“We believe we’ll be able to pay the wages this week, but before we have the money on our account we’re a bit careful,” Saab Automobile spokeswoman Gunilla Gustavs told the Wall Street Journal.
When the transfers of July wages to 1,600 white-collar employees were due last week, Saab could not pay.
Swedish Automobile issued a subscription notice for five million shares under an existing €150 million credit facility between Swedish Automobile and GEM Global Yield Fund Ltd.
Explains the WSJ: “According to this facility, Swedish Automobile can issue shares to GEM at 90% of the average of the closing bid prices of the shares over a period of 15 days.”
Using this formula, the five million new shares would generate proceeds of about €6.5 million.
The Swedish labor union Unionen plans to send a formal demand letter to Saab on Wednesday or Thursday. Once received, Saab has seven days to pay up. If no money flows, the union can file for Saab bankruptcy. The union more or less has to, because if there are no bankruptcy proceedings, there will be no unemployment support for the employees.
“We will send the letter if we can see the money has not been wired to our members,” a Unionen spokesman in Stockholm told just-auto. “We have not seen any money yet. Our process of collection will go on until we see the money is wired to the accounts of our members. No-one will be more happy than our members if … the money is paid this week.”
Unionen represents 1,000 of Saab’s 1,600 white-collar workers. The WSJ says Saab owes Unionen members 35 million Swedish kronor ($5.5 million) in unpaid salaries. If this is the case, then total monthly payroll plus taxes and social fees should be in the neighborhood of $15 to $20 million per month. That’s a lot of money swirling down the drain while not a single car is made.