Saab Secures $44.6 Million Cash Injection

May 2, 2011
Production will begin within a week

Dutch car maker Spyker said on May 2 that it reached a deal on a cash injection for the troubled Swedish car manufacturer.

"Spyker entered into a 30 million euro (US$44.6 million) convertible loan agreement with Gemini Investment Fund Limited with a six month maturity," the company said in a press release.

In addition to the loan from Gemini, Saab will request a loan drawdown of 29.1 million euros from the European Investment Bank (EIB) -- which the company said was expected next week, securing a total of 59.1 million euros.

The drawdown forms part of a 400 million euro loan secured from the EIB last year.

"With the receipt of these funds, Saab automobile secured the liquidity that is required to restart production," the company said.

Spyker bought Saab from General Motors in January 2010, but has been struggling to find funding to keep the embattled Swedish car manufacturer running. Saab was forced to halt production at the beginning of April due to a dispute over unpaid bills.

"I would like to apologize to our dedicated employees, suppliers, dealers and customers for the disruptions of the past weeks," said Victor Muller, Spyker's chief executive and Saab Automobile chairman.

Spyker and Saab continued to work on securing medium- and long-term funding, Spyker said. "The priority is to get production going again and then of course we are still working on the long-term funding," added company spokeswoman Gunilla Gustavs.

She said Muller was in China "and is having discussions with Chinese car manufacturers and that would be more of a long-term solution."

Sweden's national debt office on April 28 approved controversial Russian businessman Vladimir Antonov as a new investor in Saab. A former Spyker shareholder, Antonov was blocked from taking a stake in the company when Spyker bought it from GM last year because of concerns over his business dealings and rumors of ties to organized crime.

Earlier this month, the Swedish government gave Saab the green light to sell its property -- including its plant in Trollheattan, western Sweden -- to raise funds to start up production. The plan calls for the Swedish National Debt Office (NDO) to release its security in Saab Property to guarantee the EIB loan to Saab. The Swedish government however said the deal still needed approval from the EIB.

Copyright Agence France-Presse, 2011

See Also
Saab a Step Closer to Cash as Sweden Approves Russian Owner
Cash-strapped Saab Requests Altering Financing

Popular Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!