If plans for Swedish real estate firm Hemfosa to buy and lease back Saab's factory push through, Saab will be thrown a lifeline. Unfortunately, the complexity of Saab’s financial situation makes this deal difficult, according to Hemfosa's chief executive.
Since April, Saab has been working to sell and lease back its factory to alleviate a cash crunch that has put a stop to production and forced it to stop wage payments.
According to Hemfosa CEO Jens Engwall, the real estate consortium that was supporting his firm is totally prepared to purchase Saab's factory in Trollhattan in southern Sweden.
He explained that what’s keeping the deal from happening is “the EIB (European Investment Bank) loan and a little money from Pang Da and Youngman."
While Saab’s short-term financing issues are far from over, its long-term future is looking good with the funding to come from Chinese auto firms Zhejiang Youngman Lotus Automobile Co and Pang Da Automobile, which both plan to purchase stakes in Saab. Getting the real estate deal would ease Saab’s problems in the short term.
It had suspended production for most of April, May and June since it can't pay suppliers. On the medium term, Saab is relying on getting regular payouts from the EIB with which it has agreed on a 400 million euro ($566 million) loan. Saab awaits the next installment of the loan to be given. Saab is owned by Swedish Automobile.