April 29, 2011 / 7:01 AM / 7 years ago

UPDATE 4-Spyker drops Saab target, taps owners, China

* Saab 2011 production target of 80,000 not achievable

* Spyker is raising funds from existing shareholders

* Q1 net loss 72 mln euros, vs Q4 loss 39 mln euros

* In talks with Chinese, others, aims to restart production

* Shares down 1.6 pct

(Adds CEO comment, updates shares, links)

By Sara Webb and Fang Yan

AMSTERDAM/BEIJING, April 29 (Reuters) - The outlook for Swedish carmaker Saab deteriorated further on Friday as its Dutch parent Spyker Cars NV SPYKR.AS cut its 2011 target and turned to shareholders as well as Chinese companies for funds.

Amsterdam-listed Spyker bought Saab from General Motors Co (GM.N) a year ago but has struggled to turn around the company.

In recent weeks it has desperately scrambled to find new sources of funding so it can pay its suppliers, after several stopped delivering parts, bringing Saab’s assembly line to a standstill for much of April.

On Thursday, Spyker was thrown a lifeline when Sweden’s Debt Office and GM both said they approved a plan for Russian entrepreneur Vladimir Antonov to invest 30 million euros in Spyker in return for a 29.9 percent stake. [ID:nLDE73R1KW]

While Spyker Chief Executive Victor Muller welcomed the Debt Office’s approval, he said it was just the first step and that other commitments, for example from the Swedish government, were required before Antonov could provide funding.

“It is unclear at this time what the consequences of the recent production stoppages and funding issues will be for our full year 2011 forecast but it is realistic to assume that realising our 80,000 cars sales forecast is no longer feasible,” Muller said in a statement.

Muller is in China as part of his hunt for fresh funds. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Russian investor gets initial nod [ID:nLDE73R1KW]

Timeline [ID:nLDE73R1BG]

Factbox on Antonov [ID:nLDE73R19D]

Five facts on Dutch Spyker Cars [ID:nLDE69S0QI]

Saab fans hope for turbocharged saviour [ID:nLDE73S19O] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>


A source familiar with the matter told Reuters one of the companies Spyker was talking to was Great Wall Motor Co Ltd (2333.HK), China’s largest sports utility vehicle maker.

Muller declined to comment.

    Chinese carmakers want to expand their product ranges at a time when sales at home are expected to slow after the government withdrew policy incentives that helped elevate the country to the world’s top auto market in 2009. [ID:nL3E7FI0YI]

    As recently as late March, Spyker stuck to its target for Saab to sell 80,000 cars this year versus about 30,000 in 2010.

    “To ensure adequate liquidity both in the short term and for the remainder of this year, management is currently raising funds from current shareholders and pursuing various initiatives to improve the group’s liquidity and strengthen the group’s balance sheet,” the company said, but did not give details.

    Martin Crum, analyst at AEK Research, said a share issue was very likely. “This is inevitable and part of the package. The issue can happen very quickly or in a few months’ time.”

    Spyker shares were down 1.6 percent by 1400 GMT. The stock rose 13 percent on Thursday on news the Debt Office had given approval for Antonov to invest in the group.

    Last month, Spyker issued 5.55 million shares, equivalent to 32 percent of its outstanding capital, when it issued new shares and swapped debt into equity. [ID:nLDE72O0BW]

    Spyker, whose first-quarter loss widened to 72 million euros from 39 million in the fourth quarter, reiterated it was in talks with various parties to improve its liquidity.

    “We are hopeful that these discussions will result in a solution very shortly so we can resume production,” Muller said.

    Saab sold 9,674 cars in the first quarter, up 167 percent from a year ago when production was disrupted at the time when GM had put it up for sale.

    One of Sweden’s best-known brands, Saab has struggled to make money for two decades. Swedish bank Nordea said in a report this week that if Saab were to go bankrupt, it would have relatively little impact on the Swedish economy, perhaps nicking 0.2 percentage points off the country’s GDP.

    In addition to Saab’s 3,350 employees, a further 5,000 working in related industries would risk losing their jobs if the company were closed, Nordea said. (Additional reporting by Gilbert Kreijger and Vincent Kroft; Editing by Mike Nesbit, David Holmes and Erica Billingham)

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