Enforcement agency acts at 15:00 CET
July 25, 2011 in News
At 15:00 the swedish enforcement agency will have taken a decision about the 40 cases they have received from different suppliers regarding unpaid invoices to Saab. The agency will inform the suppliers and Saab about its verdict.
SaabsUnited has been in contact with Gunilla Gustavs and she states that Saab is trying its best to keep a dialogue with as many suppliers as possible and they are trying their best to establish a payment plan with terms and conditions. Some of the cases that has been filed to the agency against Saab have been fought by Saab.
She said that its of course very unfortunate and sad that it has come to this point and that Saab is trying its best to talk to as many suppliers as possible.
We at SaabsUnited have heard from other sources that some cases are probably going to end up in collection of resources from Saab in order to settle the debt that they have towards some suppliers.
We will continue to monitor the situation as it unfolds…
eggsngrits said on July 25, 2011
Strange that it should come to this, I thought that Saab would have cash flow by now on the sale/lease back of the facilities. Let’s hope that the suppliers can extend credit a little more with a lien on assets. Fingers crossed, as they say.
Grumpy said on July 25, 2011
Totally agree Eggs, The question is how far this could have been avoided with the money that actually came in? We also have to assume that these companies weren’t too impressed by the repayment plan offered and they were probably thinking they could get to their money faster by chosing this option.
Big sigh!
Henrik B. said on July 25, 2011
Look at it this way – Saab has to preserve as much of the money they’ve got, in order to be able to pay future saluries, electricity, buying parts, development aso. That’s the reason Saab is sitting hard on it’s wallet.
Cheers!
sportwagon28t said on July 25, 2011
Henrik i cant believe what im reading from you
Saab have absolutely no right to hold on to money when there are suppliers it NEEDS to pay
Its that attitude thats got us into this mess in the first place
Henrik B. said on July 25, 2011
What I mean is – Saab can’t hold payments to the suppliers gone to court. But what Saab tried to do, was making seatlements where they paid the 10% now’ and the rest later. The reason for this is to be able to pay running costs. Because if all the suppliers where to go to court, yes they would probably all get paid all their money, but Saab’s accounts would oncen again be completely empty. That would me no money to keep producing cars. Heck, not even money to pay parts at arrival. And not to mention the 1.300 cars for China, which they’ve already received payment for.
So Saab has two choices at the moment: 1. Make deals with the suppliers (inor out of court), that they get paid later on. Or 2: Get the fu***** EIB kicked to he**, so that VA can step in and supply sufficient funds’ for the production to start again – and keep running. Yes’ they have 11.000i cars on order, but as long as they haven’t any parts on the shelves, those cars ain’t gonna happen – unless customers start paying up front.
Cheers!
Khrisdk said on July 25, 2011
Not really a good way to sit on the wallet.
The 41 uncontestet cases will now be looking at Saabs cash assets.
So any cash will be taken anyway.
There may be strategic reasons for not just paying, but these smaller claims will be paid one way or another.
I suspect it will be from the cash assets
This is a stalling game with high stakes
mnztr said on July 25, 2011
If you do a bit of math the $$ from the sale/leaseback is probably already spent. It was only 22M and it bought SAAB about 2-3 weeks tops. This is a high cashflow business. Even sitting still SAAB is burning cash at quite a rate.
zippy said on July 25, 2011
If this is true then I fear the worst. What was the point in selling the property in the first place? VM has been very quiet for the past few months.
jond said on July 25, 2011
You know, it’s hard to avoid the suspicion that the Swedish Government only approved the property deal at the last minute when it became obvious that if it did not then it would be faced with the salary bill at the end of the month in the form of unemployment benefits.
tauentzien said on July 25, 2011
I think its all about negotiation tactics. Saab offered a payment of 10% immediatly. They have about 800 suppliers with a debt of about 66 Mio. Euro. This means Saab offered 6.6 mio. About 100 suppliers went to Kronofogden and they are trying to get 100%. Hundrets of other suppliers said yes to the Saab offer or are still negotiating with Saab. Thats the problem. Saab can not pay 100 suppliers 100%, when they are negotiating with other about 10%. Why should someone accept 10% when you can get 100% with a little pressure?
Grumpy said on July 25, 2011
Good Point!
till72 said on July 25, 2011
Agree with Tauentzien. There are even suppliers still negotiating who put their debt to the enforcement agency. It’s hoping for the best and preparing for the worst.
Peter95 said on July 25, 2011
Exactly. When suppliers have been given and agreed to payment terms then Saab do not honour those terms patience will run out and any possible way of getting money will be followed.
I know examples of suppliers staff not been paid for months because Saab have not payed.
skwdenyer said on July 25, 2011
But those are the risks of business. If you don’t want to risk not being paid, don’t offer credit, or have it underwritten by somebody else. There is no right to a risk-free business world.
skwdenyer said on July 25, 2011
In the UK, at least, you can’t favour one ordinary supplier over another, unless a court orders differently. Otherwise you can end up in trouble if the company subsequently does go into liquidation.
So, even if Saab have cash, sitting on it is the only viable thing to do, paying only what is ‘preferential’ (which, in the UK, would usually be wages – the government’s preference above other creditors was abolished here some years ago) or necessary to keep going towards with a reasonable chance of success.
To those who think otherwise, it is not IMHO ‘immoral’ to not pay suppliers; it is business. If the suppliers do not want to be creditors, they should not give credit. They choose to do so, and delayed payment – or non-payment in bankruptcy – is one of those risks.
If Saab were a US company, they would probably have already filed for Chapter 11 protection from creditors, allowing VM to continue to operate in a slightly more relaxed manner in order to secure a resolution; the likely outcome would be that creditors would get a small proportion of their total debts.
Sweden has – for the modern Western world – some slightly odd and rather strict rules, which don’t apply in other countries. It is a brave person who does business there!
twirix said on July 25, 2011
And now they had decided in these 42 cases.