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Saab offers suppliers deal on debts, awaiting reply
June 21, 2011 / 2:38 PM / 6 years ago

Saab offers suppliers deal on debts, awaiting reply

STOCKHOLM, June 21 (Reuters) - Troubled Swedish carmaker Saab, owned by Netherlands-based Swedish Automobile , said on Tuesday it had offered a deal to suppliers over unpaid debts in an effort to get production restarted.

Saab said on Monday its Trollhattan factory in southern Sweden would be idle for two more weeks after having stood still for most of April and May because it could not pay its suppliers and ran out of parts.

“Yesterday we handed out a proposal to the suppliers that had to do with production activities,” Saab spokeswoman Gunilla Gustavs said, declining to comment on details of the proposal.

Swedish business daily Dagens Industri reported it had seen a letter in which Saab proposed repaying 10 percent of its debts to suppliers when production starts and cash on delivery until mid-September, when it hopes to pay off the remainder of what it owes with interest of 6 percent.

“We need your full commitment to this to be able to move forward,” the paper quoted Saab chief executive Victor Muller as saying in the letter.

Dagens Industri wrote that suppliers had to respond by today to the proposal.

In recent weeks, Saab has agreed a rescue package from two Chinese car companies, Zhejiang Youngman Lotus Automobile Co and Pangda , that will solve its mid and long-term financing problems, if approved by authorities in China and Europe.

Short-term financing, however, remains a problem. (Reporting by Helena Soderpalm; Editing by Will Waterman)

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