Last week, Saab Automobile and its parent, Swedish Automobile N.V. filed for voluntary reorganization to allow themselves time to fix their financial problems. They were waiting for the go-ahead from the Swedish government all while fighting creditors, anticipating outside funds from Chinese companies Youngman and Pang Da and trying their best to pay blue-collar worker wages. Swedish Automobile N.V. CEO, Victor Muller made a statement emphasising that Saab did not contain the funds and needed extra time to fix their drama-filled issues.
A technology license agreement was signed with Swedish Automobile coöperatief U.A., a special purpose vehicle (SPV) on the morning of September 12. The 70 million euro aggreement is for the non-exclusive rights to Saab Automobile’s Phoenix architecture technology, the underpinnings for the potential next Saab car. Youngman, who is still waiting for approval for its 245 million euro investment from the Chinese government, made a statement saying that they supported the SPV agreement, providing a guarantee of payment. Despite this good news, Saab has still been under attack from Swedish creditors, and announced later in the day the confirmation that the Swedish unions filed for bankruptcy of Saab.
It doesn’t appear that Saab wants to give up just yet. After the Swedish Courts rejected the request for a voluntary reorganization, the company launched an appeal. In their most recent press release, Swedish Automobile N.V. stated that, “Saab Automobile is of the opinion that the District Court has left out of consideration that the District Court’s assignment is to avoid pure abuse of the Swedish Company Reorganization Act and approval of a reorganization request shall be based on the provision of a limited amount of documentation. Thus, Saab Automobile is of the opinion that in its ruling, the District Court has applied a much stricter standard of proof than is required under the Act.”
Their appeal is currently being reviewed by the Court of Appeal in Gothenburg, Sweden. In the mean time, Saab is still scrambling to find outside funds for the short-term. Production has still yet to restart and wages have not been fully paid. Pang Da and Youngman are still committed to investing into the company, but are not cleared just yet. Work is currently happening with the National Development and Reform Commission to finalize the process, which is scheduled to happen in November. The SPV agreement should help out once it is finalized on September 26. Until then, the company must simply take a deep breath.
Source: Saab
