Saab Auto Finance Rescue Plan Wins Tentative Swedish Approval
Saab Automobile was thrown a lifeline after the Swedish government approved with conditions a finance plan for the automaker freeing up collateral used by Saab to back a loan from the European Investment Bank.
The collateral, which includes Saab’s factory and headquarters in Trollhaettan, Sweden, would let the carmaker raise cash by selling and then leasing back the property.
“If this can give a good opportunity for Saab to continue operations and eventually become profitable it’d be very good,” Maud Olofsson, Sweden’s industry minister, told reporters today.
The plan still needs to be cleared by the European Investment Bank and faces certain conditions, Olofsson said. If approved, it would give Saab, which has been forced to halt production amid a payment dispute with suppliers, some breathing space while it awaits a government decision on whether it can bring in Russian banker Vladimir Antonov as an investor.
Saab first suspended manufacturing on March 29 after component makers stopped deliveries and demanded payment. Saab Chief Executive Officer Jan-Aake Jonsson said on April 4 that the carmaker’s liquidity “became more strained” during the second half of the first quarter.
Saab hopes to “resume normal production within a week” after securing funding, owner Spyker Cars NV (SPYKR) said April 12.
Antonov would be the buyer of Saab’s property, Olofsson said today. Saab would get at least 30 million euros ($43.3 million) in a first payment and more money later, she said.
“This was the first step, we’ve been waiting for this way too long,” Victor Muller, CEO of Spyker Cars, said in a telephone interview today. “Now we can work on the various conditions they’ve imposed that we’re trying to analyze. We will continue working through the weekend to reach agreement on the various points.”
“The outcome of the discussions is still not certain,” Spyker said in a statement today.
The Swedish government is guaranteeing Saab’s loan provided last year by the EIB, the European Union’s lending arm. The plan would cut the loan to 280 million euros from the 400 million euros agreed previously. Saab so far has drawn 217 million euros from the loan.
In a separate review, the Swedish government is evaluating whether Antonov should be permitted to join Saab as a financier and shareholder. The government, the debt office, the EIB and General Motors Co. (GM) must all give their approval under the contract signed when GM sold Saab to Spyker in February 2010.
Antonov is ready to invest at least 50 million euros in Saab, Lars Carlstrom, his spokesman in Sweden, said on April 8. The investor, who is also seeking to join the Swedish carmaker as a shareholder, has agreed to cap his stake at below 30 percent, Carlstrom said at the time.
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