Saab’s saga continues: Chinese buyers approved by court
The troubled Swedish car maker might finally be out of the weeds after a Dutch court approved its buyers finance plans at the expense of 500 jobs
STOCKHOLM—A Swedish court has ruled that Saab can continue its reconstruction after reviewing the plans of two Chinese companies to invest $933 million in the struggling brand and cut 500 jobs.
Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. say they can provide $71 million in immediate bridge-financing to the struggling automaker while it’s being reorganized.
They also plan to inject $863 million to restart production, settle the company’s debts and fund operations between 2012 and 2013.
The companies reached a tentative deal last week to buy Saab from Swedish Automobile, the Dutch company previously known as Spyker Cars, for $141 million.
Production at Saab’s manufacturing plant has been suspended for most of the year while the company struggles to pay suppliers and staff.
In September it entered a reorganization process similar to Chapter 11 bankruptcy protection in the U.S.
Part of the financing plan would use an $89 million credit from the European Investment Bank and to cut Saab’s costs by about $157 million, which includes laying off more than 500 of its 3,700 employees.
The companies said cars will continue to be made at Saab’s main plant in Trollhattan, Swe. and also begin more cost-efficient production the Chinese and international markets.
The two companies have set Saab sales target for 2012 of between 35,000 and 55,000 cars and between 75,000 and 85,000 in 2013.
In the long term, the new owners hope to increase sales to 185,000-205,000 cars, suggesting key growth factors lie in broadening its product portfolio in fast growing market segments and capitalizing on access to the Chinese market.