Saab will turn a profit by the end of 2014, under an ambitious plan laid out on Monday by two Chinese companies aiming to buy the insolvent Swedish carmaker and offering substantial long-term funding.
Under an outline business plan filed with the Vaenersborg district court in southwestern Sweden and presented to Saab's creditors on Oct. 31, Chinese companies Pang Da and Youngman intend to supply 610 million euros (US$855 million) in long-term funding to Saab.
Saab, which revealed last week that the two firms had offered to buy it for 100 million euros from its Dutch owner Swedish Automobile (Swan), would also immediately receive 50 million euros in bridge financing and would tap a European Investment Bank credit for another 63 million euros, the court filing showed.
The funding is intended to prop up Saab, which halted production six months ago as suppliers stopped deliveries due to mountains of unpaid bills and which is currently restructuring under bankruptcy protection, until it can begin on the long road to recovery.
"The financing is set to meet Saab's future financing needs," Pang Da chief executive Pang Qinghua told reporters in Stockholm through an interpreter.
The creditors at Monday's meeting did not have any initial objections to the plan, which is widely seen as Saab's last chance at survival, and the court decided not to halt its reorganization.
According to the scheme presented Monday, the company will start production again next year, making between 35,000 and 55,000 cars, and by 2014 it will be turning a profit.
By 2016 Saab is expected to be pushing out up to 200,000 cars a year, the plan showed, adding that the carmaker's biggest growth market will be in China, which is expected to account for a third of its global sales.
Returning Saab to profit will meanwhile entail cutting costs by one billion kronor ($155 million), and that 500 of Saab's some 3,700 employees -- mainly within production -- will lose their jobs.
"I truly regret that Saab now has to lay off 500 people," Stefan Loefven, the head of blue-collar union IF Metall, said in a statement, adding though he had been assured by Pang Da and Youngman management that laid-off workers would be hired back once Saab is back on its feet.
While the new business plan calls for some Saab cars to be made in China going forward, the potential new owners insisted they would also maintain production at the Trollhaettan factory in southwestern Sweden.
"We are not going to invest in a company here in Sweden and Trollhaettan and then not continue production in Trollhaettan. That would be a waste of our investments," Youngman chief executive Pang Qingnian told the TT news agency.
Saab has previously said it had about 220 million euros in unpaid bills to suppliers, but the speedily assembled business plan did not show how creditors would be repaid, though the would-be owners vowed all debts would be paid in full.
While the court and creditor approval of Saab's continued restructuring was good news for the carmaker, it was too early to declare its woes over.
Saab, which was rescued from the brink of bankruptcy only last year when Swan -- at the time known as Spyker -- bought it from General Motors for $400 million, has seen numerous schemes to keep it afloat in recent months fall through.
And the Youngman-Pang Da buyout still requires approval from a long line of interested parties, including Chinese authorities, the European Investment Bank, the Swedish debt office and GM.
The latter is expected to be the most difficult to get onboard, due to among other things, concerns over its technology going to China.
Swan's charismatic chief executive Victor Muller said late last week he thought all the stamps of approval would be secured within a few weeks.
Martin Skoeld, a car industry analyst with the Stockholm Business School, cautioned though that even after all the necessary approvals are secured the road to success will be a very bumpy one.
After the deal is approved "one can start talking about how realistic the plans are. It will take enormous amounts of capital to carry them out," he told Swedish public radio.
Copyright Agence France-Presse, 2011
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