Saab's Hopes Fade as Chinese Investors Lose Interest
Saab Automobile’s last hopes for avoiding collapse appeared to be fading Thursday, with Chinese investors getting cold feet and the court-appointed administrator recommending that its reorganization process be halted.
Guy Lofalk, the administrator, “will apply for termination of the voluntary reorganization of Saab” and two subsidiaries, Saab said.
“We definitely will not accept” Mr. Lofalk’s bid to end the reorganization, said Victor Muller, the Dutch entrepreneur who bought Saab from General Motors in 2010. Mr. Muller added that he would seek to have a new administrator appointed, reported The New York Times.
Mr. Lofalk “is completely focused on an ownership change,” Mr. Muller said. “He wants to force Swedish Automobile to sell Saab.”
Saab’s main factory, in Trollhattan, Sweden, last turned out a car more than six months ago after unpaid suppliers stopped extending credit to the automaker, leaving Mr. Muller to fight an increasingly desperate battle to restart production before the company is declared bankrupt.
Saab won court protection from creditors last month to reorganize, and Mr. Lofalk was charged with helping it come up with a convincing business plan, even as the company held out for 245 million euros (about $335 million), in promised investments from two Chinese companies, Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade.
“The situation is rather complicated,” Mr. Muller said in a telephone interview. “We’ve seen the Chinese investors making U-turns in the last few days. That is very concerning because just last week they had confirmed their interest.”
On Friday, Mr. Muller said that the Chinese companies were now offering to buy Saab outright. He said he had declined their offer and called on them carry through with the original agreement.
Cecilia Tissel, an official with the Vanersborg District Court, said the administrator’s move reflected his belief that the reorganization "won’t be successful.” She said Saab had until next Thursday to come up with a response.
There has been growing uncertainty as to whether the Chinese investments would be coming, with Reuters last week citing Pang Da’s chairman, Pang Qinghua, as saying the investment plan was no longer valid because of the reorganization. The companies later said Mr. Pang’s statement had been the result of “a misunderstanding.”
Mr. Muller said he was confident that Saab would present its reorganization plan to the court as scheduled on Oct. 31.
“No way it’s over,” Mr. Muller said. “It’s a process that we’ll fight in court.”
Swedish Automobile, Mr. Muller’s holding company for Saab and his Spyker sports car business, said earlier Thursday that it had obtained financing from North Street Capital, an American private equity firm. Under that deal, North Street was to lend Saab $60 million and buy 2.39 million new shares in Swedish Automobile at $4.19 a share.
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