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Saab says it will restart production after securing short-term loan

Mon, 02 May 2011

Saab aims to restart production within a week after its owner, Spyker Cars, secured a 30 million euro ($44.7 million) short-term loan to help ease its cash crunch.

Spyker said it will borrow the money from Gemini Investment Fund in a convertible loan agreement with a 6-month maturity. The interest rate of the loan is 7 percent a year and the conversion price is 4.88 euros per share.

Saab was forced to halt production last month after some suppliers that had not been paid stopped deliveries.

Spyker CEO Victor Muller said in a statement: "I would like to apologize to our dedicated employees, suppliers, dealers and customers for the disruptions of the past weeks. We will do everything in our power to restore the confidence in our company as soon as practically possible."

Spyker said in addition to this loan, Saab will make a drawdown request to the European Investment Bank (EIB) for 29.1 million euros.

As a result of the convertible loan and the EIB drawdown -- which is expected next week -- Saab will secure 59.1 million euros, which is the liquidity it needs to restart production, Spyker said.

Saab is also seeking a Chinese partner to ease its cash crunch. On Monday, a Saab spokeswoman told Automotive News Europe, that talks were still ongoing with Chinese automakers.

Saab has not named the Chinese companies it is talking with, but Bloomberg News quoted sources as saying the Swedish carmaker is negotiating with Great Wall Motor Co., China Youngman Automobile Group Co., and Jiangsu Yueda Group Co.

Russian businessman Vladimir Antonov is also planning to buy Saab real estate, including its production plant in Trollhatten, Sweden, and lease it back to the automaker to provide Saab with funds. Antonov would take a 30 percent stake under the deal.

By David Jolley- Automotive News