Saab ‘close to bankruptcy’ as bridge loan talks drag on
• Swedish carmaker has still not received a vital loan of €70m
• Reports that administrator is ready to pull the plug
• Owner’s shares fall more than 7% in early trading
guardian.co.uk, Tuesday 11 October 2011 12.32 BST
The administrator in charge of Saab’s restructuring under court protection could pull the plug on the process as early as Tuesday, paving the way for declaring the carmaker bankrupt, daily newspaper Svenska Dagbladet reported.
Saab has struggled for months to stave off collapse, seeking new investors and selling off assets so it could pay suppliers and employees and resume production at its plant in Sweden. But it has still not received a vital bridge loan of €70m (£61m) that was secured by Chinese car firm Youngman, money that is key to its short-term survival.
The paper said negotiations were ongoing in the Swedish capital with Youngman, but the court-appointed administrator could decide as early as Tuesday to ask a court to end Saab’s period of protection from creditors.
The administrator, Guy Lofalk, could not immediately be reached for comment.
Saab spokeswoman Gunilla Gustavs said the carmaker still expected to get the bridge loan. “We are still expecting the Youngman loan to come in,” Gustavs said. She had no comment on when the money was expected or how long Saab could last without the cash.
Saab won breathing space from creditors in late September, but still needs fresh money to pay wages and suppliers while it restructures.
If the restructuring process looks unlikely to succeed, Saab’s creditors, the administrator or Saab itself could ask for creditor protection to be withdrawn, Cecilia Tisell, a judge at the local court, told Reuters.
She said the court had not received any request of that kind.
“No, we have not heard anything like that at all from the Saab companies or Guy Lofalk,” she said.
Victor Muller, chief executive of Swedish Automobile which owns Saab, declined to comment.
Swedish Automobile shares fell 7.2% by mid-morning.
Saab had hoped protection from creditors would allow it to survive until China’s authorities approve a €245m investment by car firms Zhejiang Youngman Lotus Automobile and Pangda.
A decision by China’s National Development and Reform Commission could come as early as Friday.
The paper also quoted Swedish Debt Office spokesman Daniel Barr, who rejected media reports the government could pay off Saab’s debt to the European Investment Bank and convert the security on the loan to shares in Saab.
“No, the Debt Office does not have any such mandate,” he said.