Our Daily Saab: A Very Iffy Situation
Writing these Saab stories is becoming as much fun as visiting a fading relative in a hospice: You have to do it, but you want to get it behind you, quickly. Today is the day a court in Sweden will decide whether it admits Saab’s appeal of a prior court decision that would have forced the Swedes into bankruptcy. In the meantime, Victor Muller came up with another plan.
If the court allows the appeal (a decision could be handed down today or tomorrow), and if the appeals court overrules the prior decision and allows the reconstruction, Saab would be protected from its creditors for a while. But that’s two ifs.
If the appeal is not allowed, or if the prior decision is not overturned, then it’s bankruptcy time. In this case, Victor Muller plans to pull the €70 million ($96 million) rabbit out of his hat. Remember the €70m ($96 million) licensing deal for the PhoeniX platform? That appears to be the collateral for a €70 million ($96 million) loan from China’s Youngman, that would then stave off bankruptcy.
According to Dagens Industri, the loan would be enough for three months salaries for Saab’s idle workforce, with a little left to pay some – but by now means all of the outstanding debt to suppliers. Muller is hoping that by October, China’s NDRC will have given the go-ahead for Youngman and Pangda to invest more. That’s another if. A big one.
And here is another if: Reuters heard that “Youngman would not hand over the money until it had a guarantee from Saab that suppliers would not force it into bankruptcy.” Short of paying all outstanding debt, that’s a hard guarantee to give.
Update: According to Helsingborgs Dagblad, the court has allowed the appeal to go forward.
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A good analogy in the first sentence. SAAB had a good run. My best wishes go out its employees.
Our daily Bertel! I for one like my daily dose of Bertel. By the way, Bertel do you give... um.. public readings, meet with auto enthusiasts? Because I'd like to meet in person. At close quarters so to speak.
It's too late but these Saab articles should have been part of the "death watch" series. It is sort of a descendant of the "GM death watch".
What exactly does Saab have that a Chinese company would want? Isn't the PhoeniX platform just a future plan. Not even in the early R+D stage? It like buying a sinking (sank) ship. If they were a small but profitable company it might be a worth while inventment. Or it might not.