A sale could take place in June, as 20 potential buyers are interested in Swedish car maker Saab. according to the court-appointed administrator of Saab's legal restructuring, Guy Lofalk.
"The sale of Saab and a new owner is a prerequisite for a successful restructuring," Lofalk added. Saab launched a restructuring process on February 20 to stave off bankruptcy and become an independent unit after it was dumped by General Motors which is fighting for its own survival in the worst global slump since the 1930s.
Saab's creditors met on April 6 in the Vaenersborg district court in southwestern Sweden to determine the feasibility of the turnaround plan. None of them raised any objections. About 1,300 creditors had been summoned but only a handful turned up, Swedish news agency TT reported.
The plan showed Saab aimed to have a positive cash flow by 2011 and was seeking a deal with creditors to write off 75% of its non-prioritised debt.
Further, it said it needed one billion dollars in financing to survive.
A loan of $600 million was currently being negotiated with the European Investment Bank, "following the conclusion of negotiations with the (Swedish) government about state guarantees. "A further $400 million were expected to be injected from GM," it said.
Lofalk said Saab would concentrate production of all its cars at its Swedish hub in Trollhaettan, with the exception of the 9-4X model in Mexico.
It expected volumes to be lower in 2009 and 2010 than in 2008, when production hit 93,000 cars. But the Swedish brand expected to make 150,000 cars by 2011, owing to three new models that would be rolled out in 2009 and 2010.
Lofalk said the life cycle of Saab models had been "far too long. "Saab aims to have shorter life cycles for its products in the future and thereby have more modern cars" to compete in the European premium segment, he said.
UBS auto analyst Philippe Houchois was pessimistic, however, about the company's future after more than a decade of heavy losses. "They have restructured their balance sheet so it looks like they can continue operations," Houchois said. "But you don't have a sustainable business. It doesn't seem too promising," he said, adding that the goal of positive cash flow in 2011 was unrealistic. "I am not sure that they can make a platform (economically) viable in just 18 months," he added.
The reorganization is a Swedish legal process headed by an independent administrator appointed by the court who is working with Saab management. The process allows parts of Saab to survive and could enable suppliers, who would lose all the money owed them by the company if it filed for bankruptcy, to get some money back by agreeing to accept partial repayment.
GM, which bought 50% of Saab in 1990 and acquired the rest 10 years later, has washed its hands of the unit after years of losses and has called on the Swedish government to step up and rescue it. Stockholm has sharply criticized GM's decision to let Saab go and has repeatedly stated that it will not take over the car maker.
The Vaenersborg court on February 20 gave Saab a three-month deadline to conclude its restructuring plan but the company plans to ask for a three-month extension on May 20, news agency TT reported.
Saab employs about 4,100 people in Sweden. Including suppliers, some 15,000 jobs in the Scandinavian country are believed to be at risk if the unit disappears.
A crisis for the car supplier industry would also have negative effects on Sweden's other carmaker, Volvo, owned by Ford which has said it is looking to sell the operation.
Copyright Agence France-Presse, 2009
