TROLLHATTAN, Sweden/AMSTERDAM (Reuters) - Saab moved closer to collapse on Friday after a planned rescue by Chinese investors was thrown into doubt and a court-appointed administrator moved to lift the Swedish carmaker’s protection from bankruptcy claims.
The 60-year-old company has lurched from crisis to crisis this year and has not produced a car for months.
It was given court protection from creditors and bankruptcy claims in September -- the second time in around two years -- owing hundreds of millions of crowns to workers and suppliers.
Salvation was meant to come from investment by Chinese auto firms Zhejiang Youngman Lotus Automobile Co and Pangda Automobile Trade Co (601258.SS).
However, Saab’s owner, Swedish Automobile SWAN.AS, has now clashed with the two after rejecting their offer of an outright buyout.
“Swan has requested confirmation from Pangda and Youngman that they are able and willing to consummate the agreements that are signed,” Swedish Automobile said in a statement.
“That confirmation has not been received to date. Further discussions are ongoing.”
Doubts over Youngman and Pangda’s role in Saab’s future had caused the Swedish company’s administrator -- appointed to turn around Saab under creditor protection -- to ask the court to pull the plug on restructuring.
“There is no time to find any other solutions, given the company’s economic situation,” administrator Guy Lofalk said in a letter to the court. “In the current situation, the company is not in a suitable position for reconstruction to continue.”
Lofalk’s bombshell came just hours after an investment firm headed by racing car aficionado Alex Mascioli pledged new cash for Saab. Lofalk said the money was not enough.
At the car maker’s plant in the western town of Trollhattan, people were worried. “We had hoped for three months’ peace and quiet, and then this happens. It is depressing and tragic,” Hakan Skott, head of the IF Metall union at Saab, told Reuters.
Saab is to contest Lofalk’s decision to throw in the towel and to request he is replaced as administrator. It said the Vanersborg district court is to make a decision on its status on October 28.
Should the court agree with Lofalk, Saab is likely to be declared bankrupt. A request to this end has already been lodged by Japan-based auto safety firm Takata-Petri, but was put on hold after the court gave Saab protection from creditors.
“Saab is closer to the end than ever,” said David Tomic, economist at Dutch shareholders’ group VEB.
A closure could also have an impact on the region where Saab is based. Local officials have said up to 10,000 jobs are linked to the car maker, which itself employs about 3,400 people.
At a restaurant just outside the factory gates, a sign on the counter read: “We have been with you through both ups and downs, but now we are closing for good. Our last day will be 31/10. Thank you and good luck!”
Saab looked to have been saved in early 2010 when Swedish Automobile NV, then called Spyker, bought the firm from General Motors Co (GM.N), which wanted to ditch the brand after the financial crisis and its own bankruptcy.
Many analysts were skeptical even then that Saab, which had failed to make a profit for GM during most of its 20 years of ownership, could survive in the competitive industry.
The July agreement with Youngman and Pangda, which planned to invest 245 million euros ($336 million) in Saab for a majority stake, was supposed to put questions about the future to rest. Youngman also agreed a 70 million euro bridge loan.
But the latter has only been partly paid and the former still needs approval by China’s authorities.
Swedish Automobile CEO Victor Muller would not disclose the value of the Youngman and Pangda offer for Saab. He said they should stick to the July deal, which would give them a combined 53.9 percent stake in Amsterdam-listed Swedish Automobile.
“The token offer was unacceptable because it would trigger every conceivable change of control clause and that would possibly mean the end of Saab,” Muller told Reuters.
Saab’s plight has not discouraged enthusiast Mascioli, who bought Swedish Automobile’s sports car unit, Spyker.
He told Reuters on Friday his U.S. investment firm, North Street Capital LP, was pressing ahead with a $70 million deal that would allow Saab to keep the lights on.
“I expect the deal to go ahead. I‘m willing to do what I can with my resources for Saab,” Mascioli said in a phone interview after Swedish Automobile accepted North Street’s $10 million equity investment and $60 million loan. [ID:nL5E7LK3UG]
It was unclear whether Mascioli would step in if Youngman and Pangda dropped out of their agreement to buy into Saab.
“It’s Victor’s call. He has put a lot of effort into trying to save this company. At the moment there is a deal with the Chinese,” Mascioli said.
Muller would not be drawn on options if the Chinese walked away. “There is always a plan B,” he said. Asked what the plan was, he said he would reveal it “only if we resort to it.”
($1 = 0.730 Euros)
Additional reporting by Anna Ringstrom, Mia Shanley and Johan Sennero in Stockholm, Fang Yan and Ken Wills in Beijing and Aaron Gray-Block in Amsterdam; Editing by David Holmes and David Hulmes