Report: Saab must pay its $15 million bill from the government by Sept. 20

Article by Christian A., on September 7, 2010

Saab has to pay $15 million to the government of Sweden by Sept. 20 or Sweden's Vastra Gotaland region will ask the Swedish Enforcement Authority, the public debt collector, to enforce payment. This bill covers the period when Saab Automobile was under administration and the government of Vastra Gotaland in western Sweden, where Saab's main production plant is located.

The government had to step in to cover wages. Last Monday, Vastra Gotaland Governor Lars Backstrom said that Saab owed it SEK110.7 million ($15.3 million). Saab and its parent, Dutch group Spyker Cars NV, said that company should only be required to pay part of the amount asked for.

They claim that the debt to the government should have the same treatment as its other debts, which were written down as part of the administration process. In an interview with Dutch news agency ANP, Spyker CEO Victor Muller said that the case was "much ado about nothing" and Spyker will be fighting the claim.

But he said that the worst-case scenario would be that the company will have to make a provision for the full amount of the claim.
It was reported last month that Spyker posted another loss on Friday and reduced sales targets at Saab. Spyker said it was expecting to still lose money through next year. Spyker acquired Saab from General Motors Co. several months ago.

Nevertheless, Muller said that Spyker has sufficient liquidity and does not have to recapitalize even as it reported negative shareholders' equity. Spyker said that it has a net cash of EUR280 million and undrawn facilities of EUR266 million from a European Investment Bank loan, allowing the company to achieve its 2012 profitability target.

Moreover, Spyker posted a loss of EUR139.1 million ($177.2 million) on sales of EUR243.1 million. Spyker said that this year, its near-term sales goal for Saab is 45,000 units. While in 2011, Spyker predicts sales of 80,000 units. Spyker also maintained its long-term goal for sales of 120,000 cars per year.

Saab CEO Jan Ake Jonsson has said in July that he was confident the carmaker could achieve its goal to sell between 45,000 and 50,000 cars this year. Jonsson remarked that Saab's restart when it came out of liquidation took longer than they anticipated. He added that he was optimistic about the recently launched Saab 9-5, which has just commenced arriving in the United States.
Spyker announced its losses just two days after it said that it had more debts than assets. [via autonews - sub. required]

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Topics: saab, sweden



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