The bridge loan might just let Saab restart assembly operations next month.
For anyone disappointed to see soap operas vanish from American television there’s always the Saab saga to fall back on.
Just days after is seemed the maker was going to be forced into an involuntary bankruptcy it has been given at least another temporary reprieve, it has received the first installment of a $97 million bridge loan from one of the two Chinese companies looking to eventually buy a controlling stake in the struggling Swedish automaker.
Automaker Zhejiang Youngman Lotus reportedly has cut a $15 million check for Saab and should have the full $97 million deposited in the troubled Saab’s bank account within the next week or so. It had appeared increasingly likely that the Chinese carmaker and China’s largest auto dealer, Pang Da, were not going to get approval from Beijing regulators to complete their acquisition of a majority stake in Saab. With no new sources of cash, the Swedish maker would have been forced into what likely would have been the break-up of the company.
The new loan should help Saab cover at least some of its bills. It owes millions to 3,600 Swedish employees – which prompted their unions to try to force Saab into bankruptcy. But it also owes millions to key suppliers. Those partsmakers have been boycotting the company since late March over unpaid bills. As a result, Saab hasn’t produce any cars at its headquarters plant in Trollhattan for more than six months.
It has been able to roll out a small number of 9-4X crossovers produced at a General Motors factory in Mexico, however. And Saab is now hoping to restart the Trollhattan plant by next month.
“It is the intention to repay the bridge loan with the proceeds of the EUR 245 million equity investments by Youngman and Pang Da, which are still subject to approval by relevant authorities and parties which (Saab parent Swedish Automobile) expects to receive during the next weeks,” the maker said in a terse press release.
In June, Saab entered into a nonbinding memorandum of understanding that will give Youngman a 29.9% stake while Pang Da will get 24% of the Swedish maker for a combined investment of 245 million Euros, or$336.4 million.
The execution of the final agreement still awaits formal approval from the Chinese government but the authorization for the bridge loan suggests that Beijing may be taking a more favorable view on that deal than had seemed likely just days ago.