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If you’ve been following along with One Stop Motors as we’ve covered breaking news regarding the ongoing state of emergency at Saab Automotives (if so, respect), then you know Saab is standing at the edge of the financial plank, looking down. As the situation progresses, it appears as if the 70 year old company can’t catch a break. Still, the boardroom shuffle and court mandated drama has made Saab’s monitory misfortunes an entertaining spectacle for the world to watch. In honor of Saab’s constant grind between life or death and our unhealthy adore for a good news blizzard we at One Stop Motors are proud to present SAAB WATCH 2011!
10/27/11 – Today, Reuters.com reported on the current position Saab has situated itself into. While that may be a personal opinion, it seems hard to refute that much of Saab’s recent hardships were brought on by themselves. As Reuters reported, the Saab administrator in-charge of it’s bankruptcy prevention asked the Swedish courts, who have been protecting Saab from it’s creditors for the past month, to end the administration process of their corporate restructuring. The reason given was that Saab had insufficient funds to keep the restructuring process running.
While on the outside it may look as if Saab simply saw the wrong side of a fate, those who are familiar with the events of last week, will know it is the opposite. Late Sunday, Saab killed it’s deal with Chinese investors Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. that had been in place since June. What would have gotten Saab $340 million in loans and funding, was dropped by Swedish Automobile (the parent company of Saab) based on their unwillingness to hand over controlling interest of the doomed car manufacturer. Instead, they’ve elected to look for investments from other parties. With one day left before Swedish courts can put an end to Saab’s bankruptcy protection, it seems unlikely that the courts will side in the company’s favor (though they said they will hear the company out until they make a decision). Saab has already missed the deadline to react to the administrator’s request. It’s this kind of carelessness and negligence that leads us to assume the courts will release an injured Saab out into the wild for it’s creditor preditors to pounce.
The question become, does Saab deserve to be rescued? To avoid potentially losing the Saab name all together, they cut ties to the fastest and potentially only significant financial pipeline they had. Yes, they have issued $10 million worth of stock to North Street Capital LP and accepted an additional $60 million in loans from the U.S. based hedge fund managment firm last week. This must have boost their confidence quite a bit, as a few days later, they denied the Chinese investment deal. Suddenly, however, they’ve had to scramble to find some breathing room before their protection gives out. Even though the Chinese investors continue to claim that the deal between them and Saab is still valid and they plan to come through with the capital, it is uncertain how involved Saab is willing to be with this. Trading in immediate debt relief to save a name brand seems foolhardy on Saab’s part. Especially when you consider that the move alone could cripple their recovery entirely. What is really worst then? Losing a name or losing everything (including over 3,000 jobs)? To Saab, at least, the name is more important. Perhaps they have a few cards still left face down.
We will continue our coverage of SAAB WATCH 2011 as the news breaks. Check in with us regularly to learn the latest developments in the Saab story. As always, we encourage you to visit us at OneStopMotors.com; you’re one stop for buying and selling used vehicles online. You can also follow us onTwitterandFacebook.