IMPORTANT NEWS: National Electric Vehicle Sweden has agreed to buy the assets of Saab Automobile and the sale is expected to be finalized during the summer.

Monday, January 23, 2012

Youngman "totally serious" about buying Saab

Last week a delegation of Trollhättan officials and representatives from suppliers and labor unions traveled to China to meet Chinese Zhejiang Youngman Lotus Automobile and learn about its interest to buy Saab. The clear impression from the trip seem to be that an offer from Youngman on Saab is imminent.

Legal adviser of the labor union IF Metall, Darko Davidovic, told just-auto that Youngman made an impression on the unions representative on the trip.

"He was with a delegation that met Youngman who showed them the factories they have. They showed them they have the financial possibilities to buy the whole of Saab. They are totally serious - they have a lot of ideas," Davidovic said.

According to representatives from the suppliers, Youngman will make an offer within one week or two.

"They said [on 20 January] the week, or the week after next. They will have a strong talk to the lawyers. They are ready to take over production in Sweden," managing director of the Swedish suppliers association FKG, Frederik Sidahl, told just-auto.

CEO of European automotive supplier association CLEPA, Lars Holmqvist, told just-auto that it had sent along a Chinese-speaking representative from Bosch on the trip, and this representative came back telling CLEPA that Youngman had indicated that it could put in an offer of around EUR 1 billion for Saab.

There is however one potential obstacle that could delay or even stop a deal, the Chinese National Development and Reform Commission. The NDRC is the top official economic planning body in China, and the NDRC effectively has the final word on both foreign investments in China as well as Chinese investments abroad. An approval from the NDRC can take as much as three months, and during this time the administrators of the bankruptcy needs money to run the bankruptcy estate.

"They [administrators] have only one job - to sell it for the best price. I think they'll find a buyer in two weeks because they don't have any money. Every day costs a lot of money - they have to sell pieces from the company to have the salaries paid," labor union legal adviser Davidovic said to just-auto.

The union delegate on the trip to China also reported that Youngman has approached a further company with a view to paying the Swedish administrators in the interim, while any NDRC approval was sought, although details of this are unclear.

"They [Saab] have to have 300-400 people employed and all the costs of running the factory. It is the minimum people just to keep the boat floating - maintenance, heat, water, electricity serving the machines so they don't break," said Davidovic.