SAAB AUTOMOBILE INFORMS EMPLOYEES ON SALARY PAYMENTS
Zeewolde, The Netherlands, 23 August 2011 - Swedish Automobile N.V. (Swan) and Saab Automobile AB (Saab Automobile) announce that there is a risk of delayed payment of August wages to Saab Automobile employees as some of the funds that were committed by investors may not be paid in time to effect such salary payments.
Saab Automobile is taking all necessary actions to collect these funds in time and continues discussions with various parties to obtain additional short-term funding so that the payments can be made, as well as resume sustainable production. There can however be no assurance that the necessary funding will be obtained or the funds collected. View the attachments for this post at:
And there has been no salaries paid so far. The employee unions are now aiming at declaring Saab to become bancrupt (which to my opinion should have been done a long time ago)
The Saab owners are now being suspected to have violated Swedish law by trying to run an enterprise despite being in deep debt.
To say that Saab has had a rough 2011 would be one heck of an understatement. Sales are trickling slowly, the automaker's Trollhattan plant hasn't consistently produced vehicles since late April because suppliers weren't getting paid, and a failed alliance is making the Swedish automaker look like it has cooties.
Now it appears as though Saab is taking legal steps to keep the company going, as Reuters is citing a public radio report that claims the automaker will soon apply for court protection from creditors. If the courts grant temporary creditor protection, Saab will begin a process of corporate restructuring at the hands of an administrator and company management.
Though Saab has yet to officially confirm its intention to enter creditor protection, the move would seem to make sense given the automaker's string of disappointments and dire finances. The automaker announced earlier this week that it would delay its second-quarter report until August 31, perhaps to buy time until Saab officially engages the courts. That news followed Saab's announcement that August salary payments to employees may be late.
So what would creditor protection do for Saab? The move would likely buy the automaker additional time to drum up more alliances and raise more cash. If Saab still can't secure additional money or find new partners (there has been some success on this front), it appears all but inevitable that the company will dissolve.
SAAB AUTOMOBILE AB FILES FOR VOLUNTARY REORGANIZATION, SAAB AUTOMOBILE PARTS AB AND OVERSEAS SUBSIDIARIES ARE EXCLUDED
Zeewolde, The Netherlands, 7 September 2011 - Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) will file for voluntary reorganization today at
09:00 CET with the District Court in Vänersborg, Sweden. Swan and Saab Automobile are of the opinion that, considering Saab Automobile's current limited financial resources, a voluntary reorganization will entail the best preconditions for using existing resources in the most efficient way. The eventual purpose of the proposed voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman.
The proposed voluntary reorganization will be a self-managed, legal process under Swedish law headed by an independent administrator appointed by the court who will work closely with the Saab Automobile management team. As part of the process, Saab Automobile has formulated a reorganization plan, which includes a number of aspects aimed at lowering its cost-base and creating a viable, competitive and independent organization. This reorganization plan will be presented to creditors in more detail within three weeks of the filing, although this period could be extended by the court.
Following court approval, the voluntary reorganization 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. Swan and Saab Automobile are confident that they will secure additional short-term funding for the reorganization period and are currently in negotiations with several parties about obtaining such funding. Funding for Saab Automobile to exit reorganization has been secured through binding agreements with Pang Da and Youngman as announced on July 4, which agreements are, however, subject to obtaining certain approvals.
As part of the reorganization filing, the court-appointed 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. With regards to outstanding debts to creditors, Saab Automobile will seek the support of its creditors for the reorganization process and is confident it will obtain this support, particularly because Saab Automobile aims at full redemption of outstanding debts.
Saab Automobile has proposed that the District Court appoints Swedish lawyer Guy Lofalk as administrator, who also was the administrator in the successful 2009 Saab Automobile reorganization. Victor Muller, CEO of Swan and CEO and Chairman of Saab Automobile, and the Saab Automobile management team will cooperate closely with the administrator to execute the reorganization plan. The voluntary reorganization process will cover Saab Automobile AB, Saab Automobile Powertrain AB and Saab Tools AB. All other entities, including Saab Parts AB and all overseas entities such as Saab Great Britain and Saab Cars North America, are excluded from the reorganization.
The reorganizati "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."
and the court ruled against the appeal for reorganisation. The main objection was that with about 1 billon Euro debt and no firm committment of future funding the appeal is not credible. Thus bancrupcy is very likely.
SAAB AUTOMOBILE UPDATE ON VOLUNTARY REORGANIZATION
Zeewolde, The Netherlands, 9 September 2011 - Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) aim to submit their appeal on the District Court's decision to reject Saab Automobile's proposal for voluntary reorganization on Monday September 12, 2011.
In yesterday's decision, the District Court argued that the application of Saab Automobile lacks evidence that the purpose of a formal reorganization can be fulfilled. The Court is of the opinion that the first reorganization of Saab Automobile cannot be considered to be a successful one. It is further unclear to the Court whether - and if so when - the Chinese authorities will approve the EUR 245 million equity contribution of Pang Da and Youngman and whether the planned funding will be sufficient to structurally solve Saab Automobile's financial problems. The Court finds that it is unclear how Saab Automobile will be able to end the liquidity crisis and continue its business. The current stops in production are likely to have resulted in considerable loss of the goodwill of the company and an impairment of the Saab trademark.
Saab Automobile disagrees with this interpretation of the voluntary reorganization proposal and aims to submit its appeal on Monday September 12, 2011. After the court has received the appeal it is expected that a decision on the appeal is taken soon after.
In the meantime, Swan and Saab Automobile continue discussions with several parties about obtaining additional funding for the short term.
Swan will update the market on further developments.
MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.