The Continuing Story of Saab, Part 412.5: Three Ring Circus

[William Maley]

The Continuing Story of Saab, Part 412.5: Three Ring Circus

William Maley - Editor/Reporter - CheersandGears.com

October 22, 2011

Saab’s goal of getting out bankruptcy is turning very nasty. First, Autocar is reporting the court-appointed administrator placed in charge of the company's reorganization affairs, Guy Lofalk has asked the Swedish court to terminate the automaker's reorganization process. Lofalk doesn’t have enough confidence in Saab getting enough funding to continue with the process. This move would end the Saab’s protection from creditors while it looked for money.

Saab is upset with Lofalk’s decision and has applied to the Swedish court to remove Lofalk as its administrator.

“In our view Lofalk has overstepped all possible areas of his mandate as administrator. He is basically focused on a change of ownership of Saab and not on the reorganisation itself, which is what he was appointed to do by the court,” Saab CEO, Victor Muller said in an interview with Swedish Radio P4 West.

Mueller also told Radio P4 West that he believes Lofalk’s talk with Pang Da and Youngman have changed their minds from buying a 50-percent stake in the company to a full takeover of the company. Reportedly, the two companies offered made a takeover offer today. Saab refused the offer and the two companies have backed off completely.

“We have had some very clear indications that the Chinese investors were not going to fund [saab] as they agreed last week in writing. Last weekend Lofalk went to Beijing to meet with both Pang Da and Youngman. Clearly [those meetings] caused them to change their minds and go for an effort to make another kind of deal. That is unacceptable,” said Muller.

Saab has been looking to other investors to help raise money. On Thursday, Saab said it had obtained financing from North Street Capital, a U.S. private equity firm. Under that arrangement, North Street was to lend Saab $60 million and buy $10 million worth of shares in Swedish Automobile.

“[This is] definitely not the end of Saab. In the past two or three years Saab has been declared dead by so many people, so often and so far everybody has been wrong and they will remain wrong. Saab will not go down,” Muller said.

Source: Autocar, Inside Line