Saab faces bankruptcy as Chinese back away
Source: Bloomberg News |
October 22, 2011, Saturday
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Print Edition
Print Edition
SAAB Automobile's chances of avoiding bankruptcy dwindled after two Chinese companies backed away from plans to invest in the carmaker.
Pang Da Automobile Trade and Zhejiang Youngman Lotus Automobile offered to buy Saab rather than invest in the automaker's owner, Swedish Automobile. The new offer was rejected, Saab said yesterday.
The about-face is the second blow to Saab's efforts to survive after the company said a court-appointed administrator plans to terminate a voluntary reorganization, possibly forcing Saab to exit creditor protection. The court will rule on the request next week.
The two Chinese companies, which had planned to buy a combined 53.9 percent of Swedish Automobile, offered to buy the carmaker for a token sum after speaking to a person overseeing the reorganization, according to sources.
Howard Wheeldon, a senior strategist at brokerage BGC Partners in London, said: "If the Chinese are not prepared to pay a reasonable value for it, the shareholders and creditors are better to let it wind up.
"So much damage has been done to the brand anyway these past six months, and it was not doing well before it imploded. The end is now definitely nigh."
Swedish Automobile wants Pang Da and Youngman, which had previously offered to invest 245 million euros (US$338 million), to reaffirm they are "able and willing to consummate the agreements," Saab's owner said yesterday.
Saab, which has produced few cars since it first halted automobile production in March because of a lack of money, avoided bankruptcy last month after a Swedish court granted the voluntary reorganization.
Pang Da Automobile Trade and Zhejiang Youngman Lotus Automobile offered to buy Saab rather than invest in the automaker's owner, Swedish Automobile. The new offer was rejected, Saab said yesterday.
The about-face is the second blow to Saab's efforts to survive after the company said a court-appointed administrator plans to terminate a voluntary reorganization, possibly forcing Saab to exit creditor protection. The court will rule on the request next week.
The two Chinese companies, which had planned to buy a combined 53.9 percent of Swedish Automobile, offered to buy the carmaker for a token sum after speaking to a person overseeing the reorganization, according to sources.
Howard Wheeldon, a senior strategist at brokerage BGC Partners in London, said: "If the Chinese are not prepared to pay a reasonable value for it, the shareholders and creditors are better to let it wind up.
"So much damage has been done to the brand anyway these past six months, and it was not doing well before it imploded. The end is now definitely nigh."
Swedish Automobile wants Pang Da and Youngman, which had previously offered to invest 245 million euros (US$338 million), to reaffirm they are "able and willing to consummate the agreements," Saab's owner said yesterday.
Saab, which has produced few cars since it first halted automobile production in March because of a lack of money, avoided bankruptcy last month after a Swedish court granted the voluntary reorganization.
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