Struggling Saab may get yet another lifeline

STOCKHOLM — Two Chinese companies have reached a tentative deal to take over struggling car maker Saab for 100 million euros ($141 million), the company's owner Swedish Automobile said Friday.

The move by Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. marks the latest rescue attempt for cash-strapped Saab, which has been fighting for survival since General Motors Co. sold it in 2010 to a small Dutch company specializing in luxury cars.

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 U.S.

Swedish Automobile, the Dutch company previously known as Spyker Cars, said it had entered a memorandum of understanding with Youngman and Pang Da for the sale of all shares in Saab.

If the deal is finalized and approved by regulators it would mean that both of Sweden's car makers end up in Chinese hands. China's Geely Holding Group bought Volvo Cars from Ford Motor Co. for $1.5 billion in 2010.

"It's fantastic because the future of the company is now secured," Swedish Automobile CEO Victor Muller told Swedish Radio. "We know will have the stability and the funding to execute our business plan."

Guy Lofalk, who is in charge of Saab's reorganization under bankruptcy protection, withdrew his earlier request to terminate that process, saying the Chinese deal had improved the chances of a successful outcome.

In a document filed at the Vanersborg District Court, Lofalk said that Pang Da and Youngman had agreed to finance the reorganization as well as Saab's business plan.

"These new conditions must be investigated before a decision can me made on terminating the reorganization," he said.

The two Chinese firms had earlier agreed to invest €245 million for a 53.9 percent stake in Saab, but the deal was held up by Chinese regulators and Swedish Automobile canceled that agreement on Sunday.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Struggling Saab wins bankruptcy protection

STOCKHOLM — Struggling car maker Saab gained fresh breathing room in its fight for survival on Wednesday when it won a court appeal to be granted protection from creditors while it awaits Chinese investment.

A court of appeal in west Sweden said in a statement it had overturned a lower court decision which had rejected allowing Saab the protection it sought, known as a reconstruction.

It said there was "no reasonable reason to consider that the goal with a reconstruction cannot be met."

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Saab hopes creditor protection will allow it to survive until China's authorities approve a 245 million euros ($336 million) investment by car firms Zhejiang Youngman Lotus Automobile and Pangda.

Saab, owing August wages to workers and 150 million euros to suppliers, sought protection from creditors this month, but was turned down by a lower court.

Owned by Netherlands-listed Swedish Automobile , the company backed up its appeal by pointing to, among other things, agreement for 70 million euros of bridge financing with the help of a guarantee from Youngman.

Three unions representing workers at Saab have sought the company's bankruptcy to activate a state scheme to pay wages. But creditor protection also activates that scheme.

Blue collar union IF Metall said in a statement this meant its bankruptcy application was no longer needed.

"Now the company and its employees will get a much needed breathing space systematically to develop a long-term business plan," IF Metall chairman Stefan Lofven and the IF Metall Saab chapter head Hakon Skott said in a statement.

Production at Saab has been more or less at a standstill since April when unpaid suppliers pulled the plug on deliveries.

Sweden's debt collection agency had already begun seizing assets at the behest of unpaid suppliers.

Copyright 2011 Thomson Reuters.

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Struggling Saab says it wages and payroll again Miss

AMSTERDAM - struggling Swedish automaker Saab said on Tuesday, that it can pay almost half of its employees this month, because there has been no means expected revival had fears about its precarious finances.

Saab has finding means lurched out of a cash crisis to another in the last few months, so that it can restart production.

Assembly plant was halted in April, if suppliers refused to deliver until they were paid, and Saab only just out declared a demand after one of its units, parts be averted bankruptcy last week.

The company suffer deepened Tuesday when Saab said that it had delayed payment of wages to its employees employees because some were paid the funds committed by investors in a timely manner.

Saab spokesman Eric Geers said the decision affects about 1,600 people of 3,640 employees, around 45 per cent of the staff, but refused to say when they will be paid out or how much money still used Saab so that it could pay wages.

"The money has been committed, the only thing is, it has been delayed." This very, very unhappy is for those who are affected, "said Geers."

Shares in Saab were to fall as 20.8 percent before partially restore for trade to 11.6 percent 1.485 euros, the biggest Decliner on the Amsterdam stock exchange.

The company said it will take all necessary steps companies, to collect money and continue to get talks with several parties about additional short-term financing.

Copyright 2011 Thomson Reuters.

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