3rd UPDATE: Saab, Seeking GM Split, Given Time To Restructure
20 Februar 2009 - 4:05PM
Dow Jones News
Swedish car maker Saab Automobile AB Friday was granted
protection from its creditors so that it can be reorganized and
said it will seek to separate from its owner, General Motors Corp.
(GM).
"We are now recreating Saab Automobile as an independent unit,"
Saab Chief Executive Jan-Ake Jonsson said in a statement after the
Vanersborg District Court in southwestern Sweden approved its
request to begin the reorganization process.
"Today is the beginning of a new chapter in Saab's history."
Sweden's government maintained its arms-length approach, saying
it doesn't plan any support for Saab, though it didn't rule out the
possibility of guaranteeing loans that Saab has sought from the
European Investment Bank.
Saab said it hopes the court process over three months will
transform it into a functioning company that is fully independent
from its struggling Detroit-based owner. To accomplish this it will
seek fresh funding from private and public sources, it said.
The court appointed lawyer Guy Lofalk as administrator. Saab
said the reorganization will be spearheaded by Lofalk, Jonsson, and
Stephen Taylor, an international reorganization expert.
Saab will present its reorganization plan to creditors within
three weeks, it said.
State secretary Joran Hagglund at the Swedish Ministry of
Enterprise, Energy and Communication, told Dow Jones Newswires the
government wasn't preparing any direct support for Saab.
Hagglund said expectations shouldn't be high for the future of
Saab, which has been generating losses consistently over the years.
"In the competitive situation there is right now, one can't hope
for big miracles," he said.
Saab last year sold fewer than 94,000 cars, down from about
125,000 vehicles in 2007. Its best-ever year was in 2006, when it
sold 133,000 cars, making it a tiny player in the global auto
industry.
GM, as part of its effort to secure more loans from the U.S.
government, had sought five billion Swedish kronor ($572 million)
from the Swedish government. Sweden Wednesday rejected that
request. GM bought a 50% stake in 1990 and acquired the rest in
2000.
Saab in recent days has applied for a loan, believed to be about
SEK5 billion, from the European Investment Bank. But Hagglund said
Sweden would guarantee such a loan only if Saab first presents it
with a firm business plan.
"It's the same for (Saab) as for everybody else," he said.
"There must be a reliable business plan. No guarantor would step in
if they know (the borrower couldn't repay the money because of dire
business prospects). We would look at the whole business
situation."
He said Sweden, under existing law, may for a limited time pay
Saab employees' salaries if the company runs out of cash. Hagglund
said he didn't know if that could be the case "tomorrow or in a
month."
It remained uncertain Friday where, if at all, Saab may find the
money it needs to survive as an independent company.
Swedish investment fund Investor AB (INVE-B.SK), a former
shareholder in Saab Automobiles, declined to comment on whether it
would be interested in taking a stake in Saab again.
Jonsson said in a statement that Saab over the next 18 months is
ready to launch three new models: the 9-5, 9-3X and 9-4X. He said
that reorganization would help it "get these products to market
while minimizing the liquidity impact of Saab on GM."
Sweden in Decembers presented a SEK28 billion aid package for
its auto sector. Most of it, SEK20 billion, consists of guarantees
of EIB loans.
Sweden's other car maker, Volvo Cars, a unit of Ford Motor Co.
(F), at the end of January applied to the EIB, backed by Sweden,
for EUR475 million.
Company Web site: www.saab.com, www.gm.com, www.volvocars.com
-By Ola Kinnander, Dow Jones Newswires; +46-8-5451-3097; ola.kinnander@dowjones.com