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Saab Gains New Investor, Promises To Pay Workers

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2010 Saab 9-5

2010 Saab 9-5

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If you haven’t been following our coverage of Saab’s woes, the automaker was forced to shut down production at its plant in Trollhattan, Sweden back in April because it couldn’t pay suppliers due to a cash shortage.

Since then the automaker has done its best to acquire short term cash, forming alliances with Russian and Chinese partners, selling off land, and now this week, selling off more shares.

That's right, Saab has announced that it has issued shares to investment group GEM Global Yield Fund Limited. The exact number of shares issued and the price thereof will depend on a 10 day pricing period, which commenced on August 3. The number is expected to hover around 5 million shares, which equates to roughly 17 percent of the company.

Unfortunately, even optimistic estimates put the shares' value at a combined $10 million, which is far short of what Saab owes its workers and suppliers. 

With its newly found funds, however, Saab expects to at least be able to pay the outstanding wages of its white-collar workers but how much it will help the company remains to be seen.

Saab, together with its parent company Swedish Automobile (formerly Spyker), plans to continue discussions with parties to obtain further short-term funding to be able to restart and sustain production.

The last we heard, Saab promised to start production at the end of August but the chances of that happening are getting slimmer as each day goes by.
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Comments (2)
  1. The rumors on Saabs United website is that there is a potential American investor who will step in and save Saab. If this is true, then perhaps the brand will survive against everyone's expectations.
     
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  2. OK. So I am not the most savy when it comes to the business side of auto manufacturing. I am one of those guys that bought a ton of GM stock prior to the BK, with the hopes of them turning things around and was hoping for a decent gain. Not so much, as it turned out to be a total loss. Anyway, I am in the market to purchase a new vehicle and Saab is offering kick-butt deals on their 2011 9-3 Turbo AWD. With the fate of the company not yet known, is there anyone out there that can shed some light on or provide updated info as to whether or not the company will survive. I do not want to buy a car, then have the company stop production all together, i.e. Oldsmobile. Thank you...
     
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