I find it amazing that Sweden just shuts doen for a good part of the summer. I guess when you have snow-bound, dark winters, the long summer hours must be enjoyed to the maximium.
Of course, I fully expect that the people with business-saving decisions to make have kept more regular hours, but it’s undeniable that the press have taken a holiday on the Saab ownership issue in the last few weeks – until today.
GP.se are the first to break the hiatus with an article today wondering when there’ll be some financial answers as to what’s going on.
The Googletrans quote:
On August 20 must Saab Automobile ask the district court’s permission to continue the restructuring that began February 20.
In early summer, said Saab’s CEO, Jan-Åke Jonsson, in a GP interview that he “assumes” that there is no request for extension of reconstruction. 14 days later we met again, this time in Almedalen on Gotland. When told Jan-Åke Jonsson that Saab had orders which justified an increase in production, but no money to do it.
Saab Automobile has not money to pay for the materials needed to produce what they must survive in, cars. A couple of weeks ago there was general meeting when the balance sheet was restored, a requirement to not be forced into bankruptcy. Saab’s department described the situation for TT news: “Actually, we are a healthy company now.”
It is disastrous for the credibility to make such a statement in a company that has just received a debt of close to eleven o’clock billion written down by 75 percent. There is a remaining debt of nearly three billion, and suppliers may take eight billion of Saab costs.
Hardly a description of a healthy company.
They go on to ask the basic question – do they have to money to continue and will the new owners inject new capital?
These questions are going to continue until someone from either Koenigsegg or Saab comes out and provides some answers. Unfortunately that’s probably not going to happen until the deal is signed, if then.
When this whole process was at it’s beginning, Saab were indeed saying that they wanted to get the deal signed by the end of July. It’s now early August and that hasn’t happened yet, but it’s likely that the Opel deal has been taking some of the GM people’s time.
Here’s the bigger issue, though, and it’s one that I think maybe GP.se have overlooked, as will others in the next few days.
GM gave Saab enough cash to continue operations, supposedly until the end of the year when they would no longer be part of the GM family (either through sale or disbandment). Sustained operations at Saab’s current lower level shouldn’t be too much of a problem.
GP.se focus at the start on Saab’s possible application to the Swedish courts on August 19 for a continuation of their reconstruction process.
But the big question is this: do Saab need that continuation?
The focus of the reconstruction process is protecting Saab from creditors demands whilst they reconstruct their business plans and structure. This has largely been achieved with the accord that wrote down Saab’s debts by 75% and extended the terms of the remainder.
This was no doubt a difficult decision for creditors but they knew the score – the chance for Saab to survive with a new owner means more business in the future, and 25% of something is better than 100% of nothing.
With this agreement in place, do Saab need to extend reconstruction? Or can they keep going with what they’ve got for a couple of months until handover to Koenigsegg, getting back to normal terms with creditors for current transactions in the process?
I guess time will tell.
Thanks to Per for the GP.se link.