Saab, Sotskombank, A-Tec, Japan Property Statistics: Bankruptcy
Saab Automobile’s chances of avoiding bankruptcy dwindled after the two Chinese companies that had agreed to invest in the company instead offered to buy it for a token sum, people with knowledge of the matter said.
Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile, which had planned to buy a combined 53.9 percent stake in Saab’s parent Swedish Automobile NV, made the offer after speaking to the person overseeing Saab’s court- administered reorganization, said the people, who declined to be identified discussing the private talks.
The two Chinese companies had previously offered to invest 245 million euros ($338 million) to help Saab stave off bankruptcy. The about-face is the second blow to Saab’s efforts to turn around the carmaker after the company said yesterday the court administrator plans to terminate the reorganization, possibly forcing Saab to exit creditor protection.
“If the Chinese are not prepared to pay a reasonable value for it, the shareholders and creditors are better to let it wind up,” said Howard Wheeldon, a senior strategist at Bgc Partners LP in London. “So much damage has been made to the brand anyway these last six months, and it wasn’t doing well before it imploded. The end is now definitely nigh.”
Swedish Automobile dropped as much as 10 cents, or 12 percent, to 75 cents and was down 1.2 percent as of 11:57 a.m. in Amsterdam trading. The stock has dropped 76 percent this year, valuing the Zeewolde, Netherlands-based company at 24.8 million euros.
Saab, which has produced few cars since it first halted production in March because of a lack of money, avoided bankruptcy last month after a Swedish court granted the voluntary reorganization.
Saab has turned down the offer from Pang Da and Youngman and insisted that the two stick to the original agreement, the people said. Eric Geers, a Saab spokesman, declined to comment.
“Any plan is possible during the process of reorganization,” Pang Qinghua, chairman of Pang Da, said in a telephone interview. “It’s possible for new proposals popping up during the process.”
“All three parties are trying to find the most beneficial plan,” Pang Caiping, executive director of Youngman’s passenger gar group said by telephone.
Ukraine’s Central Bank Decides to Liquidate Sotskombank
Ukraine’s central bank said it decided to liquidate PAT KB Sotskombank after it failed to restore financial stability following the 2008 global credit crisis.
The Kiev-based Natsionalnyi Bank Ukrainy appointed Nataliya Khorolenko as a temporary administrator to assume control at Sotskombank in order to stabilize it in March 2009. She will now supervise the liquidation process, the central bank said on its website.
Ukrainian banks were shaken by the global financial crisis, which dried up credit and weakened regional currencies. The former Soviet republic was forced to seek an International Monetary Fund bailout to support its financial industry.
Ukraine was in the process of liquidating 20 banks as of Oct. 5, according to central bank data.
A-Tec Sells Motor Unit to China’s Wolong Investment Group
A-Tec Industries AG (ATEC), the insolvent Austrian engineering company, sold 98 percent of its ATB electric drive unit to China’s Wolong Investment GmbH, a subsidiary of the Asian nation’s Wolong Group, A-Tec’s bankruptcy administrator said Oct. 19 in a statement.
Sevan Sells Vessels, Stake to Teekay to Avoid Bankruptcy
Sevan Marine ASA (SEVAN) agreed to sell its three floating oil production and storage vessels and new shares to Teekay Corp. (TK), as well as convert about $124 million of unsecured bonds to equity, to avoid bankruptcy.
Teekay will pay $668 million for the Voyageur, Piranema and Hummingbird vessels and $25 million for a 40 percent stake, Arendal, Norway-based Sevan said Oct. 18. Sevan will also raise $25 million in a sale of stock to existing share- and bondholders. Unsecured bondholders will receive Sevan Marine’s 29 percent stake in Sevan Drilling ASA.
Sevan Marine has struggled with larger-than-expected maintenance costs on its Voyageur unit. The company has been in talks with bondholders to stave off bankruptcy after reaching an agreement in July to defer interest until the end of September.
“The crisis has found a happy solution,” Chairman Jens Ulltveit-Moe said by telephone. “The creditors have got a significantly better settlement than if Sevan had declared bankruptcy.”
The deal will see Teekay and existing shareholders end up with 40 percent each and unsecured bondholders with 20 percent. Teekay, a Vancouver-based oil tanker company that transports about 10 percent of the world’s seaborne oil, also operates FPSOs through its Petrojarl unit, which it took control of in 2006.
Japan Property Bankruptcies to Rise in 2012, Researcher Says
More Japanese property companies may file for bankruptcy in 2012 as banks become more selective to improve their balance sheets as the outlook in the U.S. and Europe deteriorates, Tokyo Shoko Research Ltd. said.
About 500 real estate companies may go under next year, up from about 450 this year, according to estimates by Nobuo Tomoda, executive director at Tokyo Shoko. A total of 441 went bankrupt in 2010, the data showed. The Topix Real Estate Index fell the most in more than three weeks.
Japanese banks may seek to improve their balance sheets by cutting back on riskier loans amid concern that the outlook for the U.S. economy will worsen and the European debt crisis may drag on, prompting them to limit the number of property companies they lend to, Tomoda said. Suncity Co., a condominium developer with 25 billion yen ($325 million) of debt, filed for bankruptcy protection on Sept. 26 after it failed to get extensions on loans, according to a statement.
“We have entered a period with the highest probability of bankruptcies,” Tomoda said in an interview in Tokyo. “We are likely to see some real estate companies go bust all together.”
Japan’s top seven developers have a 51 percent share of the apartment market in Tokyo as of 2010, an increase from 30 percent three years earlier, according to a report by Masahiro Mochizuki, an analyst at Credit Suisse Group AG.
The nation’s real estate market picked up in 2007 when investment into property funds nearly doubled to 11 trillion yen, according to STB Research Institute Co. That prompted developers to buy more land, and companies including Suncity were left with more debt than they could repay after the collapse of Lehman Brothers Holdings Inc. in 2008.
“Financing is much more crucial for real estate companies in comparison with other sectors,” Tomoda said. “Without funding, real estate can’t be brought. And without properties, there’s nothing to sell.”
The smaller real estate companies may be hurt by banks’ decisions to cut back on loans, prompting a higher number of bankruptcies even as the total debt of companies that go under may drop this year and next, he said.
Almost one in three of the 159 publicly traded property companies in Japan have debt that’s more than twice their equity, a level that needs to be monitored closely for bankruptcies next year, Tomoda said.
To contact the reporter on this story: Anthony Aarons at aaarons@Bloomberg.net.
To contact the editor responsible for this story: Anthony Aarons at aaarons@Bloomberg.net.