Bankrupt Saab Automobile Said to Attract Interest From India’s Mahindra
Mahindra & Mahindra Ltd. (MM), India’s biggest sport-utility vehicle manufacturer, is interested in buying at least parts of bankrupt Swedish carmaker Saab Automobile, two people familiar with the situation said.
Mahindra, based in Mumbai, is in the process of trying to set up meetings with the two court-appointed administrators who are overseeing Saab’s bankruptcy to possibly buy parts of the carmaker or the whole company, said the people, who declined to be identified because the plans are private. Mahindra has yet to hold discussions with the administrators, the people said.
Roma Balwani, a Mahindra spokeswoman, declined to comment, while Chief Financial Officer Bharat Doshi wrote in a text message that he was in a meeting and wasn’t available to talk.
Swedish Automobile shares tripled in Amsterdam trading, closing at 24 euro cents. The stock has plunged 93 percent this year, valuing the Zeewolde, Netherlands-based company at 8.64 million euros ($11.2 million.)
Saab filed for bankruptcy Dec. 19 after running out of cash. General Motors Co. (GM) sold the Trollhaettan, Sweden-based company in February 2010 to Dutch sports-car maker Spyker Cars NV (SWAN), which later changed its name to Swedish Automobile NV. Saab first halted production in March, unable to pay suppliers. Chief Executive Officer Victor Muller said this month that several parties had expressed interest and that Saab still has a chance to emerge from bankruptcy.
At least one Turkish company is also interested in investing in Saab, one of the people said. The Turkish government wants the country to have a car brand of its own, and is trying to help a manufacturer take over at least parts of Saab, the person said.
Hans Bergqvist and Anne-Marie Pouteaux, the attorneys handling the bankruptcy, didn’t immediately return messages seeking comment.
Mahindra completed the purchase of a 70 percent stake in Ssangyong Motor Co. (003620) earlier this year for about $368 million as it sought to benefit from the Pyeongtaek, South Korea-based company’s technology and international sales network.
Ssangyong, previously controlled by SAIC Motor Corp., sought bankruptcy protection in February 2009 after losses caused by plunging SUV sales. The automaker said in March it plans to spend more than 240 billion won ($208 million) on product development and brand building this year after Mahindra took control.
Mahindra, the maker of Scorpio and Xylo vehicles, also bought out Renault SA (RNO)’s stake in an Indian sedan-making venture and acquired control of Bangalore-based Reva Electric Car Co. last year to broaden its automobile lineup.
Muller, before declaring Saab bankrupt, had been pursuing a 600 million-euro loan from Zhejiang Youngman Lotus Automobile and a Chinese bank. The move followed a failed attempt earlier this year to sell a stake to a partnership of Jinhua, China- based Youngman and auto dealer Pang Da Automobile Trade Co.
Saab has about 3,600 employees, 3,400 of whom are at the main plant and offices in Trollhaettan. Sweden’s government will pay their salaries for a limited time under the country’s bankruptcy law.
The company traces its roots back to the establishment of aircraft manufacturer Svenska Aeroplan AB, which was set up in 1937 and began building cars 10 years later. The auto business was split off from the aerospace operations, now called Saab AB (SAABB), in the 1990s, with GM gaining a 50 percent stake in 1990 and full control in 2000.
To contact the reporter on this story: Ola Kinnander in Stockholm at email@example.com
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