By on October 31, 2011

 

Today, Saab creditors met in a packed-beyond capacity courtroom on Vänersborg. After a short deliberation, the district court approved the reorganization plan, Göteborg’s Posten reports. It will cost 500 jobs in Trollhättan. On Friday, China’s Youngman and Pangda had agreed to take over Saab 100 percent – in a Memorandum of Understanding, which isn’t worth much, and which is littered with caveats.

The reorganization plan, (full text here), was feted in a lengthy press release. It starts like this:

“Pending the approval from all relevant parties, short- and long-term funding for Saab Automobile is assured: Youngman and Pang Da have expressed their commitment to provide EUR 50 million, to fund Saab Automobile while in reorganization. In addition, the Chinese investors will provide a minimum of EUR 600 million in funding to restart production, to settle the company’s clear and due debts and to fund operations for the 2012-2013 medium-term timeframe. To provide funding for the revised business plan and provide long-term financial stability the new Chinese owners have also budgeted funding for the planned expansion of Saab Automobile’s portfolio and additional operations to be set up in China.“

And then it continues:

“Saab Automobile has not received the funds from Pang Da and Youngman that have been committed for today.”

Sound familiar?

Sweden’s Aftonbladet figures that the suppliers alone are owed some $230 million. There is a $300 million EIB loan. $328 million in preferreds are due to GM in 2016. The cost of developing a new platform is in the neighborhood of a billion dollars.

Neither Pangda nor Youngman have anywhere near that money sitting around in their bank accounts. They are dependent on investors, banks, governments. China has tightened the purse strings on its banks, creating what is called a “shadow banking system”, a giant below the table loansharking operation, which many, including the Wall Street Journal, expect to explode any minute. China’s car market is growing in the low single digits, while expensive capacity expansion projects are underway. As far as car producers go, Youngman is at the bottom of the long Chinese food chain.

The reorganization plan expects continuing losses through the 2013. It sees Saab return to profitability in 2014 on sales of around  200,000 units annually. Hope springs eternal.

 

 

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8 Comments on “Our Daily Saab: Saab Lives Another Day, Waits For Chinese Money...”


  • avatar
    Robert.Walter

    Hope is one of the stronger flavors of delusion.

  • avatar
    jeff_vader

    I have a feeling that this will now spiral on for at least another six months. The EIB approval, the GM approval and of course most importantly the NRDC approval will spin this out for quite awhile longer yet. And its if none of those decisions go to appeal/lawsuits.

    If I were Youngman/PangDa I wouldn’t be paying anymore in til at least one of those is finalised, so I hope all those suppliers who voted yes today have got nice deep pockets.

  • avatar
    Quijote

    I’m very interested in knowing why TTAC is so obsessed with Saab. And how would you know that neither Pangda or Youngman have nowhere near that kind of money in their accounts? That’s borderline defamation to me, the media has a responsibility to be accurate with their reporting, and to make such a claim is inaccurate.

    Firstly, the fact that one of the companies is privately held means you’ll never really know how deep their pockets are.

    Secondly, Pangda just had an IPO earlier this year and in that event alone they raised over $1 Billion dollars. They are also one the largest auto distributors in China, with over 1,000 retail locations throughout the country. With these facts alone, you don’t really think they don’t have the lack of funds you are referring to in your article, do you? Please tell me you aren’t that delirious.

    Saab still has a very deep hole to get out of, but clearly it looks like Saab’s worst days are behind them. Google is your friend, use it in order to keep the “Truth” part of your name intact.

  • avatar
    getacargetacheck

    This whole saga is beginning to taste like General Tso’s Hummer.

  • avatar
    GS650G

    So hundreds of millions in past due bills have to be paid before the first nut gets turned on production. And then 200K customers are waiting patiently for their new SAAB to bring a new dawn. And the Chinese investors are going to pony up the money for all this.

    OK, I guess we can believe in that.

  • avatar
    jeff_vader

    Quite. But add into that melting pot the new 9-4X. Just what the European market needs: an auto only, petrol only crossover that is based on a Chevy that returns 24mpg when fuel is nearly $10.00 a gallon. I’m sure they’ll be queuing up round the block for those. Especially at the rumoured UK price of £35000.

    I know its a crying shame for people to be losing their jobs but there are too many brands making too many cars for too few customers, especially in Europe. The market had spoken. No one knew what Saab was anymore & nobody really cared. To get even close to the figures SWAN are now suggesting the advertising budget alone would run into hundreds of millions.

    I just keep thinking that this is not a viable business. Outside of China anyway.

  • avatar
    Domestic Hearse

    Der norba le da morba id coming id a gorba later. Een den da Pangda da bangda id a joke on da Saab anna dobda hork. Der Mueller der bueller, bueller, andybody, bueller? Nope da dope der mope. Da stick in de fork anna bork, bork, bork, bork. Tada! De Chineeb dumb links!


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