Update: The court have said that there will be no decision reached today. The decision is expected tomorrow Thursday at 14:00 CET.
It is expected that the Vänersborg district court today at 14:00 CET will announce it's decision whether to approve or disapprove Saab's application to enter into reconstruction of the company.
If approved, the court will also appoint the administrator of the reconstruction. Saab has asked that lawyer Guy Lofalk is appointed.
In the reconstruction application, Saab writes that the company needs time in order to get the necessary permits and to finalize negotiations concerning funding. Saab's short-term debt was SEK 6.9 billion at the end of June. Of this SEK 2.3 billion was short-term debt to suppliers and SEK 1.7 billion was short-term debt to other companies in the group. In addition there were SEK 2.6 billion in long-term debt.
A blog fueled by enthusiasm about Saab, the greatest car company between the North and the South Pole. And their cars, which probably is the only cars that would start on a cold and crispy South Pole morning.
Wednesday, September 7, 2011
Saab Automobile files for reconstruction
Saab has just announced in a press release that the company is filing for voluntary reorganization (or reconstruction as it is known in Sweden).
Saab Automobile and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB is included it the filing which will be done at the district court in Vänersborg at nine o'clock local time.
Saab Automobile Parts AB and overseas subsidiaries is excluded from the filing.
Both Chinese companies Pang Da and Youngman supports the reconstruction.
If the reconstruction is approved by the court, the court will appoint an administrator. Saab has suggested Swedish lawyer Guy Lofalk who was administrator during the last reconstruction Saab went through in 2009.
Victor Muller, CEO and Chairman of Saab Automobile, said:
"Since securing the long-term funding through conditional agreements with Pang Da and Youngman, who both support this voluntary reorganization, we have focused on securing funding to bridge the period until we receive their funds. We have concluded that a voluntary reorganization process will provide us with the necessary time, protection and stabilization of the business, allowing salary payments to be made, short-term funding to be obtained and an orderly restart of production to be prepared."
"While the voluntary reorganization process will no doubt present us with a number of tough issues and decisions, I believe that Saab Automobile will emerge stronger from this process. The potential for Saab Automobile as a viable, independent premium car manufacturer is there, as shown by the rejuvenation of our product portfolio, approximately 11,000 orders and the conditional long-term funding already in place through the binding agreements with Pang Da and Youngman that will give us access to the Chinese market."
"I would also like to express my deep gratitude to our employees, dealers, suppliers and all other stakeholders who have been so patient and understanding in the past trying months. I realize that we have severely tested their patience, but it has been heartening to see that in general, our employees, dealers, suppliers and other stakeholders have stood by us through this tough period. I look forward to continuing these relationships and collectively start building a brighter future for Saab Automobile."
Saab Automobile and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB is included it the filing which will be done at the district court in Vänersborg at nine o'clock local time.
Saab Automobile Parts AB and overseas subsidiaries is excluded from the filing.
Both Chinese companies Pang Da and Youngman supports the reconstruction.
If the reconstruction is approved by the court, the court will appoint an administrator. Saab has suggested Swedish lawyer Guy Lofalk who was administrator during the last reconstruction Saab went through in 2009.
Some points about the proposed reconstruction:
- A reconstruction entails the best preconditions for using the current limited financial resources in the most efficient way.
- The purpose of the proposed reconstruction process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman.
- Saab has formulated a reconstruction plan, to be presented to creditors in more detail within three weeks, which includes a number of aspects aimed at lowering its cost-base and creating a viable, competitive and independent organization.
- The reconstruction will be executed over an initial period of three months. If required, the reorganization period can be extended by another three months, up to a maximum of twelve months.
- The administrator will apply for the Swedish state's wage guarantee scheme to allow wage payments to all Saab Automobile employees to be made.
- August salaries are expected to be paid within a short time frame following the court approval.
- Saab Automobile aims at full redemption of outstanding debts to its creditors and is thus confident that the reconstruction will obtain the support of the creditors.
- Saab is confident that additional short-term funding for the reconstruction period will be secured and is currently in negotiations with several parties about obtaining such funding.
Victor Muller, CEO and Chairman of Saab Automobile, said:
"Since securing the long-term funding through conditional agreements with Pang Da and Youngman, who both support this voluntary reorganization, we have focused on securing funding to bridge the period until we receive their funds. We have concluded that a voluntary reorganization process will provide us with the necessary time, protection and stabilization of the business, allowing salary payments to be made, short-term funding to be obtained and an orderly restart of production to be prepared."
"While the voluntary reorganization process will no doubt present us with a number of tough issues and decisions, I believe that Saab Automobile will emerge stronger from this process. The potential for Saab Automobile as a viable, independent premium car manufacturer is there, as shown by the rejuvenation of our product portfolio, approximately 11,000 orders and the conditional long-term funding already in place through the binding agreements with Pang Da and Youngman that will give us access to the Chinese market."
"I would also like to express my deep gratitude to our employees, dealers, suppliers and all other stakeholders who have been so patient and understanding in the past trying months. I realize that we have severely tested their patience, but it has been heartening to see that in general, our employees, dealers, suppliers and other stakeholders have stood by us through this tough period. I look forward to continuing these relationships and collectively start building a brighter future for Saab Automobile."
Tuesday, September 6, 2011
Saab to file for reconstruction tomorrow?
Swedish local Trollhättan news online TTELA reports that according to Dagens Industri, Saab will probably file for reconstruction at the Vänersborg district court tomorrow. Guy Lofalk, the lawyer who handled Saab last reconstruction will most likely be appointed to lead this reconstruction also.
The hope is that the planned Chinese investments will be reason enough for the court to allow another reconstruction. When a company is in reconstruction the creditor can not file for bankruptcy in Saab and the reconstruction will therefore protect Saab. During a reconstruction the employees' wages are paid by the Swedish state. But there is no guarantee that a new reconstruction will be allowed by the court or that it is a success.
According to Swedish news agency TT, Saab would not comment on the latest news.
The hope is that the planned Chinese investments will be reason enough for the court to allow another reconstruction. When a company is in reconstruction the creditor can not file for bankruptcy in Saab and the reconstruction will therefore protect Saab. During a reconstruction the employees' wages are paid by the Swedish state. But there is no guarantee that a new reconstruction will be allowed by the court or that it is a success.
According to Swedish news agency TT, Saab would not comment on the latest news.
Labor union IF Metall not to file for bankruptcy now
Head of the blue collar union IF Metall, Stefan Löfvén (picture), has told Swedish Radio that after talking to the Saab management the union have not given up hope that Saab will solve the recent problems to pay wages and will thus not file for bankruptcy at this point. This is contrary to what the union's general counsel Darko Davidovic said yesterday when he made it clear that the union was ready to file for bankruptcy today afternoon. According to GT.se the reason is that Saab is in a meeting with a potential investor.
"If we had determined that there is no alternative, no way forward and so on, then we had acted earlier with a bankruptcy because we have the obligation to protect our members' interest in the best way," Löfvén told Swedish Radio.
Löfvén continued saying that the union may still file for bankruptcy, but it is a big step to take and there are still other credible options that they want to give a chance:
"It's not just a legal process, which we may have to engage in. And it is certainly not ruled out. But it is more to it than that. There is a symbolism of this and it will not help the company's survival. So it's a very big step to take. We are prepared to take it if necessary to protect our members' interests and money. But we also want to watch and see if there are any other options. There are still some options that are credible."
When talking to DI.se Löfvén was even more clear:
"As long as we believe that Saab has options we will wait to file for bankruptcy, but it must be within a reasonable period of time and less than three weeks," said Stefan Löfven to Di.se.'
It is also worth noting that if a creditor, e.g. the unions, should go to the court and file for bankruptcy in Saab, then Saab will be given time to respond and there will be a legal proceedings that can last from two weeks to several months. And if Saab pays the wages and challenge the filing, then the creditor will no longer have a case and the bankruptcy filing will be stopped. In other words, a bankruptcy filing will be bad for Saab's image, but will not necessarily end in a real bankruptcy.
"If we had determined that there is no alternative, no way forward and so on, then we had acted earlier with a bankruptcy because we have the obligation to protect our members' interest in the best way," Löfvén told Swedish Radio.Löfvén continued saying that the union may still file for bankruptcy, but it is a big step to take and there are still other credible options that they want to give a chance:
"It's not just a legal process, which we may have to engage in. And it is certainly not ruled out. But it is more to it than that. There is a symbolism of this and it will not help the company's survival. So it's a very big step to take. We are prepared to take it if necessary to protect our members' interests and money. But we also want to watch and see if there are any other options. There are still some options that are credible."
When talking to DI.se Löfvén was even more clear:
"As long as we believe that Saab has options we will wait to file for bankruptcy, but it must be within a reasonable period of time and less than three weeks," said Stefan Löfven to Di.se.'
It is also worth noting that if a creditor, e.g. the unions, should go to the court and file for bankruptcy in Saab, then Saab will be given time to respond and there will be a legal proceedings that can last from two weeks to several months. And if Saab pays the wages and challenge the filing, then the creditor will no longer have a case and the bankruptcy filing will be stopped. In other words, a bankruptcy filing will be bad for Saab's image, but will not necessarily end in a real bankruptcy.
Bankruptcy is not an option
It looks like Saab is in its conclusive days. These are the days that may decide if Saab is to be or not to be. We can't rule out the possibility that Saab can raise the money needed to pay wages and thus prolong the turmoil another fourth night when the September wages are due. But what if they can't raise the money?
One option that has been mentioned to protect the company from creditors if money can't be raised in time is a reconstruction. An option I do not believe in.
Others say that a bankruptcy would be the best option and it would not necessarily mean the end of Saab. But the way I see it a bankruptcy would definitely mean the end of Saab as we know it.
From earlier we know that it is not possible to buy the Saab brand name and the Gripen logo without buying the whole company. So if Saab is to continue after a bankruptcy, someone needs to buy the whole company. But what will the company produce? All three current models (9-3, 9-5, 9-4X) are fully based on technology design and developed under GM or technology sourced from GM.
When Swedish Automobile bought Saab from GM they made contracts by the hundred to regulate and secure the use of GM technology. If Saab and Swedish Automobile go bankrupt, all these contracts will most likely be void. If someone wants to buy Saab and restart production, that someone must make new contracts with GM.
But will GM be willing to make these contracts again? And will GM be willing if the buyer is Chinese or Russian? Or another possible future competitor? Probably not.
And so bankruptcy is no option. A bankruptcy would be the end and not the start of new Saab.
To save Saab the only option is to raise money.
One option that has been mentioned to protect the company from creditors if money can't be raised in time is a reconstruction. An option I do not believe in.
Others say that a bankruptcy would be the best option and it would not necessarily mean the end of Saab. But the way I see it a bankruptcy would definitely mean the end of Saab as we know it.
From earlier we know that it is not possible to buy the Saab brand name and the Gripen logo without buying the whole company. So if Saab is to continue after a bankruptcy, someone needs to buy the whole company. But what will the company produce? All three current models (9-3, 9-5, 9-4X) are fully based on technology design and developed under GM or technology sourced from GM.
When Swedish Automobile bought Saab from GM they made contracts by the hundred to regulate and secure the use of GM technology. If Saab and Swedish Automobile go bankrupt, all these contracts will most likely be void. If someone wants to buy Saab and restart production, that someone must make new contracts with GM.
But will GM be willing to make these contracts again? And will GM be willing if the buyer is Chinese or Russian? Or another possible future competitor? Probably not.
And so bankruptcy is no option. A bankruptcy would be the end and not the start of new Saab.
To save Saab the only option is to raise money.
Monday, September 5, 2011
Some positive notes from today
Want to read something positive about Saab? Then Curt and Jim have come to our rescue. They have found a great review of the Saab 9-5 from Eric Peters Autos!
Here's a teaser from the review:
So check it out and enjoy!
Also worth noting from today on the positive side is that Saab last week made an exclusive deal with Zhongji Leye Auto Sales Co. for the distribution and sale of Saab cars in China. Zhongji Leye Auto Sales Co is a subsidiary of Pang Da Automobile Trade Co, which of course is planing to become part owner of Saab. In other words, progress is being done despite all that's happening. Thank's to TTAero for the heads up.
And let's stay in China for the next note too. Just-auto reports that Youngman sees no problem with getting their planned investment in Saab approved. They have already done much work with the provincial government and expect the central government to find no problems with the plans:
"Youngman is still confident to cooperate with Saab - all the documents are fully prepared," Youngman project director Rachel Pang told just-auto.
"I can't say when approval will be given. The only thing I can say is so far all the work Youngman has done with the provincial government is going very well. The central government will spend some time to investigate - we don't see any problem."
And finally, at Saab Great Britain it is business as usual. They have enough right-hand drive cars in stock and keep on as usual.
“We had a really good stock and variety, and we've still got stock in the UK so it's business as usual,” said a Saab spokeswoman told BusinessCar.
Here's a teaser from the review:
In the ride and handling department this Saab is top drawer – absolutely more fun to drive than an Audi A6 and BMW 5 Series, both of which are suffocated by over-technology. In the 9-5 you are much more involved – a driver, rather than a passive passenger.
So check it out and enjoy!
Also worth noting from today on the positive side is that Saab last week made an exclusive deal with Zhongji Leye Auto Sales Co. for the distribution and sale of Saab cars in China. Zhongji Leye Auto Sales Co is a subsidiary of Pang Da Automobile Trade Co, which of course is planing to become part owner of Saab. In other words, progress is being done despite all that's happening. Thank's to TTAero for the heads up.
And let's stay in China for the next note too. Just-auto reports that Youngman sees no problem with getting their planned investment in Saab approved. They have already done much work with the provincial government and expect the central government to find no problems with the plans:
"Youngman is still confident to cooperate with Saab - all the documents are fully prepared," Youngman project director Rachel Pang told just-auto.
"I can't say when approval will be given. The only thing I can say is so far all the work Youngman has done with the provincial government is going very well. The central government will spend some time to investigate - we don't see any problem."
And finally, at Saab Great Britain it is business as usual. They have enough right-hand drive cars in stock and keep on as usual.
“We had a really good stock and variety, and we've still got stock in the UK so it's business as usual,” said a Saab spokeswoman told BusinessCar.
Unions getting ready to file for bankruptcy
According to general counsel of the labor union IF Metall, Darko Davidovic, it is likely that the union will file for bankruptcy in Saab tomorrow afternoon. On Friday it was reported that the unions would probably wait around one week before filing for bankruptcy, but now something has changed.
"It is probable that if nothing new has come up, no payment or concrete solution, we will decide to file for bankruptcy tomorrow afternoon. There's nothing today that indicates any other decision, and we will not wait if we have no reason to wait. We have a responsibility to our members," said union lawyer Darko Davidovic to Di.se.
According to Davidovic, there is no indications that Saab has a solution within reach and tomorrow will be D-day for Saab.
Is an attempt at another reconstruction the only remaining option for Saab to buy some more time?
"It is probable that if nothing new has come up, no payment or concrete solution, we will decide to file for bankruptcy tomorrow afternoon. There's nothing today that indicates any other decision, and we will not wait if we have no reason to wait. We have a responsibility to our members," said union lawyer Darko Davidovic to Di.se.
According to Davidovic, there is no indications that Saab has a solution within reach and tomorrow will be D-day for Saab.
Is an attempt at another reconstruction the only remaining option for Saab to buy some more time?
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