* H1 2011 operating loss soars to 201.5 mln euros
* Says no certainty funding will be secured in time
* Sees substantial net loss for full-year 2011
(Adds details on financial position, background)
By Greg Roumeliotis
AMSTERDAM, Aug 31 Swedish Automobile SWAN.AS,
the Dutch parent of cash-strapped carmaker Saab, warned on
Wednesday it could lose the battle to stay afloat as losses
mounted, cash dwindled and time was running out.
The famous Swedish car manufacturer has lurched from one
cash crisis to another in recent months, scrambling to fend off
bankruptcy, pay its workers, and restart production. Its car
plant has been mostly idle since April because suppliers
refused to deliver parts until their bills were settled.
As a result of the production stoppage during most of the
second quarter, Swedish Automobile said its first-half
operating loss widened to 201.5 million euro, from a 21.9
million euro operating loss in the first half of 2010, and that
it expects a substantial net loss for 2011.
On Friday, Swedish Automobile had said it was "evaluating
all available options" after Swedish public radio quoted
sources saying that the company was to apply for court
protection from its creditors. [ID:nL5E7JQ1K1]
"Right now, the focus of Saab management is on working as
hard as possible to bring the company back into calmer waters
by significantly strengthening our financial position, reaching
agreement with all our suppliers on payment and delivery terms
and restart production as soon as possible," Swedish Automobile
Chief Executive Victor Muller said in a statement on
PREPARING FOR THE WORST
The firm prepared investors and employees for the worst,
saying it was not clear whether funding could be raised to
restart production in the short term, or whether funds that
have been negotiated for the long term could be secured in
On July 4, Saab signed a final agreement for Zhejiang
Youngman Lotus Automobile Co. to take a 29.9 percent stake in
the company and for Pangda Automobile Trade Co Ltd (601258.SS)
to take a 24 percent stake for a combined 245 million euros.
But these deals are still subject to regulatory approval,
and Swedish Automobile warned that the deals with the Chinese
firms as well as additional short-term funding had to be
secured in time or it would not be able to carry on "as a going
"We know that we can't look too far into the future just
yet," said Muller, adding that there was still investor
interest in Saab given its long-term potential. He reiterated
that the company's business plan was under review.
The company's net debt swelled to 284 million euros by the
end of June from 209 million euros at the end of March, its
total cash dwindled further to 100 million euros from 130
million euros, while its net working capital position plunged
to a negative 379 million euros from 255 million euros.
With a market capitalisation of just 18 million euros,
Swedish Automobile is now a play only for those investors with
considerable appetite for risk such as hedge funds. The shares
have lost more than three-quarters of their value since the
start of the year.
Swedish Automobile said it was still in talks with CPP
Global Holdings, an investment vehicle owned by Russian
businessman Vladimir Antonov, about the sale of its luxury car
business. The deal, announced in February, has been suspended
and it added it may consider alternatives for the division.
The Dutch-listed parent, formerly named Spyker Cars for its
luxury marque, had said the deal could raise up to 32 million
Overall the company sold 12,871 cars wholesale and 15,194
cars retail in the first half of 2011, a year-on-year increase
of 26 percent and 44 percent respectively. It is currently in
the process of rolling out its new Saab 9-4X crossover model.