On Monday it was reported that the troubled Saab was under the gun to at least begin the process of paying back owed wages to their over 4000 employees. Failure to do so could have resulted in an entire breakdown of their proposed buyout from Chinese investors as well as their creditors protection that was in place to keep them restructuring. Well, there has been no word out saying that Saab has paid anyone. Instead, the NASDAQ.com reported that Saab has offered a new proposal for ownership of their company.
There was a deal made late in October between Chinese investors and Saab that would see Saab lifted back into business but turn over the company to Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automotive Co. This did not go over well with General Motors, who even after selling the Swedish based manufacturer last year, provides Saab with a number of parts and technologies. The saw this deal as a hit to their own production as well as feeding into their Asian market competition. Since GM still has voting privileges against any deal that Saab might make to sell themselves, GM voiced their veto publicly. They would not approve of the hand-off as long as their interest was being hindered. Since then, Saab’s deadlines for their tentative deal with the Chinese and to pay owed wages have both come and gone. Now, however, Saab has a new idea.
In the article this morning, Saab has apparently proposed a new arrangement that would downgrade China’s control over the company’s stock. To appease GM directly, Saab offered an arrangement that would give the two Chinese automotive corporations 40% less stake in Saab. They would instead buy up all the remaining stock in Saab which stands at a cool 60%. They would still have controlling interest, but both Pang Da and Youngman would get 20% appease less in total stock. The article reports that is seems unlikely that GM will agree to anything that hands the Swedish company over to the Chinese.
For those who have been following the story for months now, you can probably read into the desperation Saab seems to be under. While it could be argued that Swedish Automobile, the company that bought Saab from GM last year, has done everything in their power to redeem a dying star, it actually appears as if they keep holding out for something to be given to them. Why else would they wait over two weeks to respond to GM’s denial of their China deal? Why wait until after your deadlines have passed to try and strike a deal? This is an unknown and while the company hangs between life and death, one can’t help but feel like they simply don’t know how to handle the situation. After all, two months ago they turned down the Chinese offer to buy them out because they didn’t want to lose the Saab name. A month after that, they were against the wall and had no choice but to accept a buyout. Once more, here they are, procrastinating and postponing their demise. That is, for now.
Tyler Baker; OSM Writer.
( Source : NASDAQ.com)