STOCKHOLM — A Swedish court ruled Monday that Saab can continue its reconstruction after reviewing two Chinese companies’ plans to invest $933 million in the struggling brand and cut 500 jobs.
Vanersborg District Court made its ruling after reviewing the plans by Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. and hearing comments by creditors, said court spokesman Peter Rosen.
The two Chinese companies said they can provide $71 million in immediate bridge-financing to the car maker while it is being reorganized. They also plan to inject $863 million to restart production, settle the company’s debts and fund operations between 2012 and 2013.
The companies reached a tentative deal on Friday to buy Saab from Swedish Automobile, the Dutch company previously known as Spyker Cars, for $141 million — the latest rescue attempt for the company, which has been fighting for survival since it was sold by General Motors Co. in 2010.
If the deal is completed and approved by regulators it would mean that both of Sweden’s car makers end up in Chinese hands. Last year, China’s Geely Holding Group bought Volvo Cars from Ford Motor Co. for $1.5 billion.
IHS Automotive analyst Ian Fletcher doubted the viability of Youngman and Pang Da’s business plan and whether the investments would be sufficient.
“They are taking the Geely-Volvo blueprint and looking to develop Saab in the same way, but Saab’s situation at the moment is very different to what Volvo’s situation was like,” Fletcher said. “It could take a long time to bring Saab into the same position as Volvo.”
Fletcher also pointed out that it was unclear if the deal would receive the necessary Chinese regulatory approvals.
“There’s a lot of nice, blue sky thinking,” he said. “But the question is if they have the ability, the general capability to achieve this?”
Production at Saab’s manufacturing plant has been suspended for most of the year while the company has struggled to pay suppliers and staff. In September it entered a reorganization process similar to Chapter 11 bankruptcy protection in the United States.
The Chinese companies’ financing plan was presented to creditors at the Vanersborg District Court Monday by Guy Lofalk, who is in charge of the reorganization.
Part of the plan would be to use a $89 million credit from the European Investment Bank and to cut Saab’s costs by around $157 million, including laying off 500 of its 3,700 workers.
The two companies set a sales target for Saab for 2012 of 35,000-55,000 cars and 75,000-85,000 cars for 2013.
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