Swedish Automobile will liquidate even if it sells Saab to Youngman and Pang Da

Article by Christian Andrei, on November 12, 2011

It’s possible that Swedish Automobile NV, which owns Saab Automobile, would still liquidate even if it successfully sells the brand to Chinese investors since the proceeds may not be sufficient to pay off creditors. If the deals go through, the company said that Swedish Automobile, which has tentative deals to dispose of Saab, as well as its Spyker sports-car business, will consider "all of its options,” one of which is voluntary liquidation.

Swedish Automobile said that the transactions would raise 132 million euros ($181 million) but this won’t be enough to pay off its debts amounting to 136.5 million euros. So far, the deals have not been approved and have not been finalized. This implies that the future of the company is uncertain and this makes any settlement with stakeholders unlikely as well.

On Nov. 7, GM said that it won’t approve a planned shift of the unit to two Chinese firms because it aims to protect its interests in the country.

GM still has preference shares in Saab and is the supplier of Saab’s crucial parts. Since Saab ended its production in March due to a shortage in cash, it has built very few cars.

The court has recently granted protection for the company from creditors. The Chinese authorities, the Swedish government and the European Investment Bank would all have to approve the Saab sale. The preliminary deal with Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade Co., the potential Saab buyers, is valid only until Nov. 15. [source: Autonews]

Topics: saab

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