BackSaab says no car production till August
Saab says no car production till August
Premium
Stockholm: Struggling Swedish carmaker Saab said a production stop lasting for most of the past three months would stretch into August, but it was close to a deal with suppliers who have held back parts until it pays its debts.
In recent days, Saab, owned by Netherlands-based Swedish Automobile, has secured 61 million euros in short-term funding, but has yet to get parts flowing again so it can resume building cars.
“Saab Automobile continues its discussions with its suppliers on materials supply and commercial terms and is close to reaching agreements," Swedish Automobile said in a statement on Thursday.
“Given the fact that some of Saab Automobile’s suppliers require a longer lead time to resume adequate supplies and the delay as a result of the summer shutdown period at many of Saab Automobile’s European suppliers, Saab Automobile plans to restart production by Tuesday 9 August," it said.
Swedish Automobile had said on 29 June it hoped to restart production within two weeks.
Shares in Swedish Automobile were down 0.4% at €2.83 at 04:10 pm.
Saab hit trouble earlier this year after suppliers stopped delivering to the firm due to unpaid bills. The company then said it was also unable to pay its workers’ wages.
Since then, the company has found additional funds and workers have received their salaries.
Part of the money comes from a property sale and leaseback deal that got the final nod from the Swedish government earlier in the day.
The 255 million crown ($40.1 million) deal with a consortium headed by Hemfosa Fastigeheter had already been approved by Sweden’s Debt Office and the European Investment Bank (EIB).
All three had to give the go-ahead under the terms of a loan agreement Saab has with the EIB.
Swedish Automobile said it was still in discussions with several parties to obtain further short-term funding, including completing the drawdown of the EIB loan facility.
In recent weeks, Saab has also inked deals to secure long-term funding.
Chinese car distributor Pangda and carmaker Zhejiang Youngman Lotus Automobile Co. this week pledged to buy a majority stake in the iconic Swedish brand. They also welcomed interest from Russian financier Vladimir Antonov in taking a stake.
These agreements still need to be approved by Chinese regulatory authorities, by Sweden, former owner General Motors and the European Investment Bank.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
