Saab Files For Court Protection - Everything is Beautiful
Yesterday, Sweden’s Dagens Industri reported that Saab would seek court protection today. We did not report it, because honestly, we are tired of the story. On the other hand, there were signs that things are heading to the court: Saabsunited tried its hand again on amateur spin and wrote that bankruptcy, should it happen, wouldn’t be all that bad: “It does NOT mean that SAAB is in any way dead tomorrow!” Glad this is cleared up.
This morning, employees of Saab were woken from sleep (they’ve become used to sleeping in since April) and called for an all hands meeting at 12 noon. At the meeting, they heard:
“Swedish Automobile N.V. announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) filed for voluntary reorganization today at 09:00 CET with the District Court in Vänersborg, Sweden. Swan and Saab Automobile are of the opinion that, considering Saab Automobile’s current limited financial resources, a voluntary reorganization will entail the best preconditions for using existing resources in the most efficient way. The eventual purpose of the proposed voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman.”
It looks like the fabled bridge loan is AWOL, not much to our surprise. Powered by the hot air in the rumor mill, the SWAN stock had seen wild gyrations over the last few days. Yesterday, the stock rose 26 percent. Today, trading was halted. Whoever bought SWAN at 72 Euro-cents won’t be happy.
A voluntary reorganization is no bankruptcy. However, it has to be accepted by the court. Today, Dagens Industri quotes Rolf Åbjörnsson, a lawyer specializing in bankruptcy cases who had represented Saab dealerships during the last reconstruction. He thinks the court should deny the application: “How could Saab succeed when they have no money, no production, no nothing. All that’s left is dreams.”
For a reorganization to be granted, the applicant needs to show that there is a reasonable chance of success. While Åbjörnsson thinks that the District Court will ultimately allow the reorg, the lawyer thinks it’s wrong. According to Dagens Industri, Åbjörnsson sees a possibility of criminal conduct. Says the lawyer: “I think that Saab has been involved in risky business, they wasted money for nothing. One may suspect negligence.”
Victor Muller on the other hand sings to the tune of “everything is beautiful:”
“While the voluntary reorganization process will no doubt present us with a number of tough issues and decisions, I believe that Saab Automobile will emerge stronger from this process. The potential for Saab Automobile as a viable, independent premium car manufacturer is there, as shown by the rejuvenation of our product portfolio, approximately 11,000 orders and the conditional long-term funding already in place through the binding agreements with Pang Da and Youngman that will give us access to the Chinese market.”
If that is the proof for the viability it the reorg, then this is an amicus brief for the Vänersborg court. As outlined in a report a few days ago (which earned me hate emails, threatening physical force, and suggesting that my wife’s lover drives a Saab – sorry, she has better tastes,) Pangda and Youngman have yet to file an application to China’s NDRC. And I don’t think they will anytime soon.
Imagine being called to Beijing and having your sanity questioned. Who will invest in a company that is under court protection? Can’t you wait until they are belly up? THEN you buy what’s left for fen on the remnibi. Ni dong ma?
Along these lines, Beijing-owned BAIC is seen as the main beneficiary of a bankruptcy sale. There are a few missing parts in their Saab tools collection.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
More by Bertel Schmitt
Comments
Join the conversation
Wow, who would've threaten a blogger for some negative (but true) story on a car company? Can't be a Saab investor, if there were such a creature, Saab won't be in this trouble. I know there are some diehard Saab lovers out there, but come on? It's just a car company! Which is in dire trouble not because of something unjust done to them or someone's vindictive effort to destroy them, but simply because they couldn't find a place in the (admittedly very competitive) marketplace. Meaning either there weren't enough Saab lovers or those Saab lovers did not buy enough Saabs. Still, had to admire Victor Muller's tenacity. Too bad one such person rarely is enough to save a company. I remember Studebaker have such a person once, Sherwood Egbert. Can't prevent the company's demise. Though he did prolong its life a few years.
New developments Sept. 10...