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Youngman bids for Saab, receivers cool, says source

A Saab logo covered with rain drops is seen on a vehicle in Zurich in this June 24, 2011 file photo. — Reuters picA Saab logo covered with rain drops is seen on a vehicle in Zurich in this June 24, 2011 file photo. — Reuters picSTOCKHOLM, Feb 3 — Chinese carmaker Zhejiang Youngman Lotus Automobile has made a 3 billion crowns (RM1.3436 billion) offer for bankrupt Swedish group Saab which has drawn a cool response from receivers, a source with knowledge of the situation said today.

The receivers want bids for parts of Saab rather than the whole business as that would raise more for creditors, the source said.

Saab was declared bankrupt last December after months of efforts to keep it afloat by owner Swedish Automobile.

“Youngman made an offer for all of Saab on Monday. They intend to start production in Trollhattan,” said the source, who declined to be identified.

“(The receivers) said they are not interested in a dialogue about the entity but rather want bids for separate parts of the business,” the source said.

“Such a solution would ruin any chance of future car production in Trolhattan. But they have declared in plain terms that there are other, higher bids for parts of the business which would, added up, give greater returns.”

The receivers and Youngman’s legal representative in Sweden declined to comment.

The nail in the coffin for the final rescue deal for Saab was the refusal of former owner General Motors to allow its technology, which underpins Saab cars, to fall into the hands of Youngman as it already has cooperation with the Chinese group SAIC Motor Corp Ltd (Shanghai Automotive).

The source said that, under the fresh offer, Youngman would initially produce Saab’s old 9-3 model, which is not based on the GM technology, and one Lotus model for Malaysia’s Proton. The cars would be made at Saab’s factory in Trollhattan in southwest Sweden.

Youngman has the rights to build and sell Lotus cars in China.

That would keep the business running until Youngman completed the development of Saab’s half-finished PhoeniX platform, which is expected to be the base of future models, the source said.

The new platform relies very little on GM technology, but any buyer would have to invest heavily to complete it. Youngman predicts it would take around one and a half years to do so, the source said.

Sweden’s Debt Office is the single biggest creditor to Saab having taken over the car maker’s loan from the European Investment Bank and is owed about 2.2 billion crowns.

Other companies that have been named in Swedish media as considering bids for Saab assets include Indian utility vehicle maker Mahindra and Mahindra Ltd , Turkish investment firm Brightwell Holdings and Swedish engineering firm Semcon.

Any buyer wanting to use the Saab name would have to get permission from defence and security company Saab AB and truck maker Scania, as they still own the rights to the brand.

The receivers, who are due to finish the bankrupt estate’s inventory by April, said in a statement they would not comment on interested parties or bids during the sale process. — Reuters

 

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