Even by the frenetic standards at Saab, it’s been quite a day.
It was only some 24h ago rumours were sweeping Sweden the automaker was about to voluntarily declare itself bankrupt and so end one of Europe’s longest-running business epics.
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Not quite. At the last minute it appears Chinese manufacturer Youngman has stepped in and pumped EUR3.4m (US$4.5m) into the ailing automaker in a bid to pay off taxes owed to the Swedish government.
“Yesterday it was all about bankruptcy – today money came in,” a Saab spokesman told just-auto from Sweden. “We know what is ahead of us and there is a commitment by Youngman – they have shown that commitment today.
“This is the first step and now we are going to the second step, to pull off funds to pay salaries. All the involved parties know exactly what is needed – it is a good sign – they transfer the payments. It means they believe, otherwise they would not have done it.”
The move does not address the contentious issue of overdue November salaries, although Saab’s weary workforce must be pretty used by now to late wages, having endured a seemingly never-ending series of missed cash deadlines.
What Youngman’s move does do crucially however, is make a bold statement of intent before this week’s crunch hearing at Vanersborg District Court, that will decide whether or not to accept Saab administrator Guy Lofalk’s application to have its bankruptcy protection finished.
The EUR3.4m is clearly a drop in the ocean, pocket money really, that pales into almost insignificance compared to Saab’s growing mountain of debt, but it might, just might be enough to make Vanersborg pause for thought.
The Chinese must see something of a far longer-term nature than is obvious to anyone outside Trollhattan. Youngman Saab project director Rachel Pang has now travelled back to China but the automaker told me today “there are always representatives from Youngman in Stockholm.”
Such a permanent advance guard would indicate the Chinese are serious, but the process needs an equally serious show of finance to Saab, whose near-4,000 staff are approaching Christmas with December, let alone November salaries, looming.
Meanwhile, all contingencies are being planned for. Sweden’s National Debt Office (SNDO) also told me it could recover the EUR217m loan it guaranteed to the European Investment Bank (EIB) through a potential sale of Saab’s parts and tool manufacture business should the Luxembourg body call in the debt if bankruptcy happened.
Should that occur, the SNDO would become Saab’s largest creditor, ahead even of its many suppliers, who are conservatively owed around EUR150m, but even then, the debt body would work with any receiver appointed by the Court in the event of bankruptcy.
But Saab is fervently hoping it doesn’t come to that and Youngman’s cash advance today is a clear indication the Chinese mean business.
If it’s enough of gesture to persuade Vanersborg is anyone’s guess, but the stricken automaker has been thrown yet another – small – lifebelt as it looks to cling on.
