Saab Has No Shortage of Potential Buyers
Some interesting news came out of Saab’s court proceedings in Vanersborg, Sweden this morning.
First, the Swedish court gave Saab an extension for restructuring until May 20, since no creditors of Saab had entered reservations against Saab’s restructuring plan. Saab plans to write off 75% of its non-prioritized debt, and if any of the approximately 1300 creditors that showed up for today’s hearing had objected, Saab would have been pushed into bankruptcy very quickly.
Second, a court-appointed trustee told the court that around 20 companies are interested in bidding for Saab at this point. The chatter in the industry is that at least two of the larger Chinese automakers are interested, as well as several Swedish industrial concerns, and, of course, several other unidentified companies.
All of this activity was initiated by a staggering GM recently stating that they would cut Saab loose by January 1, 2010. This, after 20 years of partnering/ownership – a period which many fans of the Swedish marque feel was disastrous for Saab.
Third, Saab is taking steps now to make their break-even point only 130,000 vehicles produced annually and then subsequently sold worldwide. Saab feels it can be quite profitable at 150,000 units, forecast to happen in 2011.
Saab reckons they need around one billion dollars (USD) of capital financing to stay afloat while they’re losing money and developing new models. They believe they can get $400 million from its former parent, GM, also its biggest creditor, in the form of debt write-offs and production assets it will give to Saab at no cost. The balance of $600 million will come from the European Investment Bank.
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