Saab is allowed to reconstruct
Source: Agencies |
November 1, 2011, Tuesday
|
Print Edition
Print Edition
A SWEDISH court yesterday ruled Saab can continue its reconstruction after reviewing two Chinese companies' plans to invest 660 million euros (US$933 million) in the struggling brand and cut 500 jobs.
Vanersborg District Court made its ruling after reviewing the plans by Zhejiang Youngman Lotus Automobile Co and Pang Da Automobile Trade Co and hearing comments by creditors, court spokesman Peter Rosen said.
The two Chinese companies said they can provide 50 million euros in immediate bridge-financing to the carmaker while it is being reorganized. They also plan to inject 610 million euros to restart production, settle the company's debts and fund operations between 2012 and 2013.
The companies reached a tentative deal last Friday to buy Saab from Swedish Automobile, the Dutch company previously known as Spyker Cars, for 100 million euros - the latest rescue attempt for the company, which has been fighting for survival since it was sold by General Motors in 2010.
Production at Saab's manufacturing plant has been suspended for most of this year while the company has struggled to pay suppliers and staff. In September, it entered a reorganization process similar to Chapter 11 bankruptcy protection in the United States.
The Chinese companies' financing plan was presented to creditors at the Vanersborg District Court yesterday by Guy Lofalk, who is in charge of the reorganization.
Part of the plan would be to use a 63-million-euro credit from the European Investment Bank and to cut Saab's costs by about 1 billion kronor (US$157 million), including laying off 500 of its 3,700 workers.
The companies said they will continue to make cars at Saab's main plant in Trollhattan, southwest Sweden, and also begin more cost-efficient production in China for Chinese and international markets.
The program also includes plans to accelerate access to the Chinese market and enter into new distribution agreements in other emerging markets, such as Russia.
The two companies set a sales target for Saab for 2012 of 35,000-55,000 cars and 75,000-85,000 cars for 2013.
Vanersborg District Court made its ruling after reviewing the plans by Zhejiang Youngman Lotus Automobile Co and Pang Da Automobile Trade Co and hearing comments by creditors, court spokesman Peter Rosen said.
The two Chinese companies said they can provide 50 million euros in immediate bridge-financing to the carmaker while it is being reorganized. They also plan to inject 610 million euros to restart production, settle the company's debts and fund operations between 2012 and 2013.
The companies reached a tentative deal last Friday to buy Saab from Swedish Automobile, the Dutch company previously known as Spyker Cars, for 100 million euros - the latest rescue attempt for the company, which has been fighting for survival since it was sold by General Motors in 2010.
Production at Saab's manufacturing plant has been suspended for most of this year while the company has struggled to pay suppliers and staff. In September, it entered a reorganization process similar to Chapter 11 bankruptcy protection in the United States.
The Chinese companies' financing plan was presented to creditors at the Vanersborg District Court yesterday by Guy Lofalk, who is in charge of the reorganization.
Part of the plan would be to use a 63-million-euro credit from the European Investment Bank and to cut Saab's costs by about 1 billion kronor (US$157 million), including laying off 500 of its 3,700 workers.
The companies said they will continue to make cars at Saab's main plant in Trollhattan, southwest Sweden, and also begin more cost-efficient production in China for Chinese and international markets.
The program also includes plans to accelerate access to the Chinese market and enter into new distribution agreements in other emerging markets, such as Russia.
The two companies set a sales target for Saab for 2012 of 35,000-55,000 cars and 75,000-85,000 cars for 2013.
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