November 29, 2021

Saab Files for Liquidation After G.M. Balks at China Deal

Saab and two subsidiaries filed with the District Court in Vanersborg, Sweden, according to Saab’s parent company, Swedish Automobile. The parent company said it “does not expect to realize any value from its shares in Saab Automobile,” and that it “will write off its interest in Saab Automobile completely.”

Victor R. Muller, the Dutch entrepreneur who had previously been chief executive of the sports car maker, Spyker Cars, acquired Saab from G.M. in January 2010 for $74 million in cash and $326 million in preferred shares. But he was unable to obtain the financing he needed to modernize the Saab line-up and reinvigorate sales at a time of global financial turmoil.

The court said it had appointed two receivers who were responsible for either selling the company outright or breaking it up and selling it piecemeal. The proceeds would be used to repay Saab’s creditors.

In a last bid for survival, Saab had been trying in recent months to arrange an infusion of cash from Chinese investors, including Zhejiang Youngman Lotus Automobile.

But “G.M. said over the weekend ‘whatever happens, come hell or high water, we won’t support a deal with Youngman,”’ Mr. Muller said.

“I honestly don’t know” why G.M. refused to budge, he added. “They wouldn’t tell me.”

He said there remained a glimmer of hope for Saab, as there were still “parties out there that have expressed an interest.” But the automaker’s fate, he said, now rested in the hands of its receivers.

Mr. Muller’s efforts to keep Saab afloat became increasingly desperate after suppliers stopped extending credit in the spring, forcing production to halt.

With salaries unpaid, unions at Saab began legal proceedings in September that could have led to liquidation of the company. Mr. Muller responded by voluntarily seeking court protection from creditors, gaining time to seek funds.

But General Motors, which retained an effective veto on any deal because it owned key patents used by Saab, refused to back the Chinese investment, fearing it would “negatively impact G.M.’s existing relationships in China.”

Swedish Automobile said that Youngman, having considered G.M.’s position, “informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded.”

“The board of Saab Automobile subsequently decided that the company, without further funding, will be insolvent, and that filing bankruptcy is in the best interests of its creditors,” it said.

James R. Cain, a G.M. spokesman on financial communications in Detroit, described the bankruptcy filing Monday as “the end of a very long and difficult road” for Saab.

Mr. Cain disputed the idea that the U.S. company had been uncooperative, saying that G.M. had been “very clear and very consistent at the late stages, when the sale was proposed, because we felt it was in the best interest of everyone to understand what our concerns were, and we never wavered from that.”

Mr. Muller said “maybe three” companies remained interested in acquiring Saab, and that in some respects bankruptcy would make the company more attractive, as there were advantages to picking it up with a clean slate.

To make a go of it, he said, any buyer would have to obtain G.M.’s permission to make the Saab 93, 94 and 95 models. A buyer would also have to obtain permission from Saab AB, the now-unrelated aerospace company from which the automaker originated, to use the Saab brand.

In a statement, Stefan Lofven, head of the IF Metall union, called on the Swedish government to help the more than 3,000 Saab employees to find new jobs. He also urged Saab’s administrator to arrange a sale of the company quickly as a single unit.

Anette Hellgren, president of the Unionen white-collar local union in Trollhattan, said the carmaker’s employees remained in limbo because of the hope of another buyer emerging. “In this time, not knowing where to go, it’s very hard,” she said.

“I don’t think people blame Mr. Muller,” she said, noting that he was met with applause Monday when he went to address workers. “It was a pity that it didn’t work out. He made all his efforts to make it fly.”

Despite a famously loyal base of customers, Saab has reported a profit only once in the past two decades, and the fact that all of the global automakers have passed it over suggests a different fate ahead. Analysts expect the company, which began selling cars in 1949, to be broken up and sold in bits.

“There’s not much left to salvage,” Anders Trapp, an auto industry analyst at Skandinaviska Enskilda Banken in Stockholm, said, noting that Saab’s customer base had been dwindling as the problems grew. “Maybe the brand will continue in some form, but there’s not much left of it anymore.”

This article has been revised to reflect the following correction:

Correction: December 19, 2011

An earlier version of this article misspelled the given name of Saab’s chief executive as Viktor.

Article source: http://www.nytimes.com/2011/12/20/business/global/saab-files-for-liquidation.html?partner=rss&emc=rss

Saab Gets New Lifeline From China

PARIS — Saab Automobile was thrown a lifeline in a deal announced Tuesday through which a Beijing-based company will take a stake in the struggling Swedish carmaker, provide a loan to help it restart production, and open access to the booming Chinese market.

Hawtai Motor will provide €150 million, or $223 million, in new financing, including €120 million for a 29.9 percent equity stake in the Dutch company Spyker Cars, which bought Saab from General Motors last year. In addition, Hawtai will provide a €30 million convertible loan with a six-month maturity at 7 percent. The deal also includes joint ventures in manufacturing, technology and distribution in China.

“I would hope that all things being equal, we have seen the last of the growing pains,” Victor R. Muller, the Spyker chief executive and chairman of Saab Automobile, said on a conference call from Beijing. China will soon be “our second home market.”

The agreement comes after increasingly fraught efforts by Saab in recent weeks to remain afloat as it drained its cash reserves and left suppliers in Sweden unpaid. Production has been halted since early April; Mr. Muller said operations should be restarted early next week.

On Monday, Spyker said that it had secured short-term loans of €59.1 million. That includes a €30 million, six-month convertible loan from Gemini Investment Fund, one of Spyker’s shareholders, and an additional €29.1 million from a loan made by the European Investment Bank.

Mr. Muller said that he still hoped that a Russian investor, Vladimir A. Antonov, will again become a Spyker shareholder in the future.

When G.M. sold Saab to Spyker early last year, it blocked Mr. Antonov, who had owned part of Spyker, from participating in the deal amid allegations of suspicious financial dealings.

Last week the Swedish National Debt Office, which guarantees the loan facility from the E.I.B., cleared Mr. Antonov to reinvest in the company. “He’s as clean as a baby,” Mr. Muller said. G.M. said it had reached a “tentative agreement” to the same effect, subject to conditions, although the E.I.B. has yet to confirm whether it will follow suit.

With the Chinese deal, Spyker no longer urgently needs to raise cash by selling property to Mr. Antonov, Mr. Muller said.

But assuming Mr. Antonov is given final clearance, he would then be free to invest in the company, and buy shares from existing shareholders, Mr. Muller said. He added: “We’ll see how it pans out.”

Through the deal, Saab’s next-generation 9-3 will be made under license in China from 2013, while Saab will also export to China from its plant in Trollhattan, Sweden. Saab is contractually barred from allowing its 9-4X and 9-5 models, which were developed with G.M., from being produced in China.

The partnership with Hawtai allows Saab “to continue executing its business plan,” after securing the required mid-term financing, Mr. Muller said. In addition, he said, “it allows Saab Automobile to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer.”

Hawtai, which is privately owned, was founded in 2000. It has two plants in China and an annual production capacity of 350,000 vehicles; it also makes diesel engines and transmission systems. It is ramping up capacity and says it plans to produce 1 million vehicles a year by 2015.

In a statement, Richard Zhang, vice president of Hawtai, described Saab as an “iconic” brand and said the deal would give his company access to innovative technology and an international network, which would otherwise “have taken us decades to build.”

He added that Hawtai was committed “to the future of Saab Automobile as a premium European car manufacturer.”

Hawtai previously made cars in a venture with Hyundai of Korea and from 2007 it started building under its own badge. According to Chinese news reports, it has also has mining rights at coal mines in Mongolia and is in the process of investing in Bank of Beijing. A Hawtai representative will take a seat on Spyker’s board, which will hence increase in size to four members from three.

The deal marks the second time that a Chinese group has bailed out a Swedish carmaker. Zhejiang Geely Holding, China’s largest privately run automaker, agreed last year to buy Ford Motor’s Volvo unit.

General Motors sold Saab to Spyker in 2010 for $74 million in cash and it also received Saab preference shares with a face value of $326 million, giving it a continuing voice in the Swedish automaker’s future. Spyker said that the Chinese investment did not need to be approved by G.M.

The latest deal is subject to approval by Chinese government agencies, the European Investment Bank and the Swedish National Debt Office.

In Amsterdam, Spyker shares rose 16.3 percent to €4.93.

Saab employs 3,800 people, mostly at the Trollhattan plant. Several thousand jobs at supply companies also depend on Saab.

Article source: http://feeds.nytimes.com/click.phdo?i=ca2b6a4cef2127dc2c7c23764b24d88f