China Saviors Said to Renege on Desperate Saab
Two Chinese firms that had pledged to provide an infusion of cash to help Saab restart production and emerge from bankruptcy are now seeking to back out of the investment deals and buy the firm outright.
Victor Muller, who controls Saab, says he is not ready to throw in the towel even as the court-appointed administrator Guy Lofalk is recommending that the Swedish automaker’s reorganization proceedings be terminated so the company’s assets can be liquidated.
“We definitely will not accept” Lofalk’s bid to end the reorganization, vowed Muller. Instead, he will seek to have a new administrator appointed, complaining that Lofalk “is completely focused on an ownership change. He wants to force Swedish Automobile to sell Saab.”
Muller is the Dutch entrepreneur who bought Saab from General Motors in 2010. Since then he has sought out a number of prospective investors, including two Chinese auto firms — Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade — which had agreed to provide about $335 million in financing and investments. That infusion would have allowed Saab to pay suppliers and restart production. Saab has not built a car in over six months since suppliers stopped delivering components.
“The situation is rather complicated,” Muller told the New York Times. “We’ve seen the Chinese investors making U-turns in the last few days. That is very concerning because just last week they had confirmed their interest.”
The Chinese companies are now offering to buy Saab outright, said Muller, adding that he declined their offer and called on them honor the original agreement.
Saab had until next Thursday to come up with a response to Lofalk’s contention that it won’t be able to complete a reorganization, according to an official with the Vanersborg District Court in which Saab’s bankruptcy was filed.
Pang Da chairman Pang Qinghua was quoted by Reuters last week as saying that the investment plan was no longer valid because Saab had sought reorganization. A short time later the two firms said Pang’s statement had been “a misunderstanding.”
“No way it’s over,” said Muller, adding that Saab will file its reorganization plan on October 31. “It’s a process that we’ll fight in court.”
Muller seems to have come up with yet another possible savior. On Thursday Swedish Automobile said it had an agreement from North Street Capital to lend $60 million and buy 2.39 million more shares of Swedish Automobile at $4.19 a share. Swedish Automobile is Muller’s holding company for the Saab and the Spyker custom sports car maker.