Saab Automobile bankruptcy
| Company type | Subsidiary |
|---|---|
| Industry | Automotive |
| Fate | Declared bankruptcy in 2012 |
| Headquarters | Trollhättan , Sweden |
Key people | Victor Muller (CEO of Spyker Cars during acquisition) |
| Products | Automobiles (e.g., Saab 9-3, Saab 9-4x) |
Number of employees | 3800 (2011) |
| Parent | Spyker Cars N.V. (2010–2012) |
Saab Automobile was acquired by Spyker Cars N.V. in 2010 through an agreement between Spyker and the then-owner General Motors. Despite efforts to circumvent insolvency during 2011, the company ultimately filed for bankruptcy after a Chinese consortium’s attempt to purchase Saab failed; this acquisition was obstructed by former owner GM, which opposed the transfer of technology and manufacturing rights to a Chinese entity. In 2012, Spyker initiated legal action against GM seeking US$3 billion in damages, citing GM’s interference with Spyker’s negotiations with Chinese automaker Youngman, which had invested in Saab Automobile. As a result, Saab declared bankruptcy in 2012. Spyker’s lawsuit was dismissed in June 2013.
2010
On January 26, 2010, General Motors announced that it had reached an agreement with Spyker permitting the latter to acquire Saab,[1] pending regulatory and governmental approvals; the transaction was finalized on February 23, 2010.[2] Under the agreement, General Motors continued to supply engines and transmissions to Saab and provided fully assembled vehicles such as the new Saab 9-4x produced at GM’s Mexican facility. The deal included a loan from the European Investment Bank backed by guarantees from the Swedish government. The financial terms consisted of an upfront payment of US$74 million due to GM by July 2010 and Spyker shares valued at US$320 million.
Saab declared plans to establish its US headquarters in Royal Oak, Michigan. A new Saab 9-3 model was slated for release in 2012, with production resuming at the Swedish manufacturing plant in March 2010.[3] Spyker Cars’ CEO and founder Victor Muller revealed in an interview that Vladimir Antonov fully financed the acquisition with General Motors’ awareness.[4]
In July, Saab projected vehicle sales between 50,000 and 55,000 units for the year.[5] As part of its growth strategy, Saab announced intentions to re-enter the Chinese market following General Motors’ withdrawal of the brand in China during 2008 amid the 2008 financial crisis. Initial sales were expected to range from 2,000 to 5,000 vehicles, with potential plans to shift production to China if market reception proved favorable. The arrangement included opening ten dealerships and was to be formalized with China Automobile Trading Co. Ltd.[6]
In October, Saab adjusted its annual production forecast downward from 45,000 vehicles to between 30,000 and 35,000 units. This revision was attributed to delays caused by a two-month plant shutdown early in the year and efforts to reverse liquidation proceedings. Reports indicated this marked the second reduction in projected output within three months.[7] Ultimately, Saab sold a total of 31,696 vehicles during 2010.[8]
2011
On February 25, Spyker Cars N.V. declared its decision to divest the sports car division in order to concentrate on Saab. The company planned to rebrand itself in May to incorporate the Saab name.
In early April, multiple suppliers ceased delivering parts to the Trollhättan assembly facility due to outstanding payments, which forced Saab to halt production on April 5.
By May 3, Spyker Cars had reached a deal with Chinese manufacturer Hawtai Motor for emergency financing intended to resume Saab’s production within a week. However, this arrangement fell through on May 12 after Hawtai failed to obtain the required approvals. Despite this setback, Spyker remained optimistic about securing a deal with Hawtai. Rumors of negotiations with another Chinese automaker, Great Wall Motor, surfaced but were denied by Great Wall on May 13.
On May 16, Spyker revealed it had signed a memorandum of understanding with China's Pang Da Automobile Trade Co. (Pang Da), which would provide Saab with the necessary capital to restart production and grant Pang Da an equity share in Spyker.
Saab announced on June 8 that production had once again been suspended due to insufficient parts supply, just two weeks after resuming operations following a seven-week stoppage. Production was scheduled to recommence on August 9.
On June 23, Saab disclosed its inability to pay June wages to its entire workforce of 3,800 employees because of financial constraints. The trade union IF Metall issued a seven-day ultimatum demanding salary payments or threatening liquidation proceedings. By June 29, salaries were disbursed.
In June, China Youngman Automobile Group and Pang Da declared their intention to acquire a 54% stake in Saab for €245 million. They also committed to funding three new models: the Saab 9-1, Saab 9-6, and Saab 9–7.
On July 26, Saab announced it could not pay July salaries to approximately 1,600 white-collar employees and was unable to confirm when payments would be made; however, all blue-collar workers received their wages on July 25.
Reports on July 27 indicated that the Bahamas-based Gemini Fund withheld loans intended for Saab employee salaries due to uncertainties involving securities guaranteeing payment. Vladimir Antonov’s Swedish representative confirmed Antonov’s close connection to this fund the same day. On July 28, the trade union Unionen warned that failure to pay white-collar salaries within two weeks would result in bankruptcy proceedings against Saab. Additionally, the European Investment Bank (EIB) announced it had declined Vladimir Antonov’s request for ownership involvement in Saab. In response, Bo Lundgren, director general of the Swedish National Debt Office, sharply criticized the EIB’s handling of Antonov’s case. On August 5, salary payments for white-collar workers were fulfilled via an equity issuance where Gemini Fund purchased five million shares in Saab.
The Swedish Enforcement Administration (SEA) initiated distraint procedures against Saab on August 17 due to unpaid debts.
By August 19, SEA confirmed over ninety claims against Saab totaling SEK169 million ($25.5 million/€18.4 million), with twenty-two cases actively in distraint proceedings. On the same day, SEA located an account at Skandinaviska Enskilda Banken holding at least SEK5.1 million ($0.8 million/€0.555 million), intended to cover debts owed by Saab to Kongsberg Automotive.
On August 23, spokesperson Gunilla Gustav stated there was a risk that August salaries might not be paid because of funding shortages; one factor being delayed promised payments. Unionen president Cecilia Fahlberg criticized the recurring issue of unpaid wages during summer and threatened bankruptcy action if payments were not made promptly. This announcement caused shares of Swedish Automobiles, Saab's parent company, to drop by 20%.
By August 25, it was confirmed that blue-collar employees had not received August salaries and it was likely that white-collar workers had also not been paid; rumors suggested their salaries might be settled on August 26. The SEA declared it had seized approximately SEK50 million (US$7.9 million/€5.45 million) and claimed entitlement over funds in Saab’s payroll account if additional assets were not found earlier. To cover monthly payroll expenses for all employees, Saab needed roughly SEK100 million (US$15.8 million/€10.9 million) available in its accounts.
Swedish Automobile postponed its interim financial report until the following week (week 35) on August 26. That same day reports emerged that Saab was preparing an application for company reconstruction due to insufficient funds preventing production restart or payment of employee wages and subcontractor debts.
After a five-day delay, Saab published its interim report on August 31 revealing a €201.5 million loss alongside revenues of €359 million for the first half of the year. It was also reported that Saab was moving forward with plans for reconstruction owing to ongoing financial difficulties obstructing production and payment obligations. Consequently, production at the Trollhättan plant ceased in 2011.
On September 7, Saab Automobile filed for voluntary reconstruction in Swedish court aiming to shield itself from creditor claims while awaiting Chinese government approval for a €245 million investment deal made in June with Pang Da and Zhejiang Youngman Lotus Automobile (Zhejiang Youngman). The following day, Swedish courts rejected this petition citing doubts about Saab’s ability to secure necessary funding for continuation.
On September 12, Saab announced entering into a technology license agreement valued at €70 million with Zhejiang Youngman. Concurrently, trade unions Unionen and Swedish Organization for Managers (Ledarna) submitted an application requesting liquidation proceedings against Saab. The company confirmed via press release that bankruptcy supervision had been petitioned by these unions.
On September 22, the Court of Appeal in Gothenburg approved the voluntary reorganization proposal submitted by Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB.
Media reports on October 28 indicated that Chinese automaker Youngman and automotive retailer Pang Da agreed on a joint acquisition of Saab Automobile and its UK dealership network from Swedish Automobile for US$140 million; Youngman acquiring a 60% stake and Pang Da taking 40%.
On December 6, General Motors announced it would not renew licenses for GM patents and technology if Saab was sold to Pang Da and Zhejiang Youngman, arguing such ownership did not align with GM investors’ interests—ironically despite many patents originally belonging to Saab before being transferred under GM ownership in 2000. Consequently, Saab began developing an alternative proposal maintaining existing ownership without including a Chinese partner as owner but rather as co-owner of a new subsidiary holding a fifty percent stake.
With no viable options remaining after GM continued blocking Chinese involvement, Saab officially filed for bankruptcy on December 19 after struggling for survival over three years. Under Swedish bankruptcy laws, filing does not preclude acquisition out of bankruptcy; therefore this marked not necessarily an end but a transition point for the company’s future prospects.
2012
Following these events, Saab's CEO Victor Muller and the company's government relations director, Anna Petre, both asserted that the initial agreement with Pang Da and Youngman—intended to grant these two Chinese firms a 54% stake in Saab's parent company, Swedish Automobile (SWAN)—had received approval from General Motors (GM). The confusion arose when Saab’s administrator, Guy Lofalk, allegedly led the Chinese investors to believe they could acquire full ownership, prompting a subsequent bid for 100% of SWAN. This development reportedly strained the relationship with GM significantly. Muller attributed the breakdown of negotiations to Lofalk’s actions, accusing him of misleading the Chinese parties about sole ownership possibilities despite knowing it was unattainable. GM’s primary concern centered on licensing issues. Muller noted that prior to this complication, Saab’s relations with GM had been excellent.
However, the credibility of Muller and Petre’s statements has been questioned. Both General Motors and Guy Lofalk have publicly denied these allegations. GM also rejected Muller’s claim that it had sanctioned the sale of Saab to Chinese entities.
Since January 26, 2010, Saab was governed by its board under Victor Muller’s leadership as chairman.
Victor Muller, in his capacity as Spyker Cars’ CEO, later initiated legal action against General Motors, holding GM responsible for Saab's bankruptcy. He stated: "Since we were compelled to file for Saab Automobile’s bankruptcy last December, we have diligently prepared this lawsuit seeking compensation for the substantial damages caused by GM’s unlawful conduct." This marked a shift in Muller’s stance, now attributing blame to GM instead of Guy Lofalk. In June 2013, a U.S. federal judge dismissed this claim.
On January 29, 2012, the receivers managing Saab's bankruptcy announced ongoing talks with four or five interested buyers aiming to acquire Saab out of insolvency. Publicly disclosed potential buyers included China’s Youngman, India’s Mahindra and Mahindra, and the Turkish private equity firm Brightwell Holdings. By February 14, 2012, receivers reported an increase to six or seven parties interested in purchasing Saab as a whole and resuming vehicle production, targeting a final selection by month-end. On March 6, 2012, three companies submitted bids for full acquisition of Saab Automobile: Mahindra and Mahindra and Youngman offered bids estimated between US$300 million and US$400 million; Tata Motors reportedly placed a bid around US$350 million but later denied involvement.
By April 10, 2012, numerous bankruptcy documents became public as the deadline for final bids expired. Since its initial restructuring in 2009, Saab had accumulated roughly €1.3 billion in debt while its total asset value was estimated at approximately €360 million. Consequently, many creditors were expected to remain unpaid. GM’s claim of about €220 million held priority due to preference shares. The confirmed bidders all intended to maintain some form of Saab vehicle production in Trollhättan. Receivers aimed to finalize a deal before summer. Additionally, concerns surfaced regarding the legitimacy of Saab Automobile's property sale in summer 2011; there was potential for the assets to be reclaimed by Saab.
On April 16, 2012, a hearing concerning Saab’s bankruptcy took place at Vänersborg District Court. The official receivers appraised assets at around US$500 million against debts totaling US$2 billion. Deducting asset value left an outstanding debt near US$1.5 billion.
On May 29, 2012, Håkan Buskhe—the CEO of Saab AB (the aerospace and defense company)—addressed the media about Saab Automobile's bankruptcy for the first time. Saab AB holds the rights to the "Saab Automobile" name and can restrict its use by any prospective buyer. Buskhe indicated that as long as production and development continued in Trollhättan, Saab AB would permit use of the name but would block any acquisition intending to relocate operations outside Sweden. It was also revealed that Saab AB maintains strategic collaborations with one interested buyer—India's Mahindra Group—in aerospace and defense sectors and is pursuing sales of its Jas 39 Gripen fighter jet to India. However, Buskhe refrained from commenting on Mahindra’s bid for Saab Automobile.
On August 6, 2012, Spyker—represented by Patton Boggs law firm—filed a lawsuit against General Motors in the U.S. District Court for the Eastern District of Michigan seeking US$3 billion in damages. The suit alleged that GM unlawfully obstructed several proposed deals between Spyker and Youngman regarding Saab Automobile during late 2011 when Youngman was prepared to invest several billion dollars to secure Saab’s future. Under the Automotive Technology License Agreement (ATLA) between GM Global Technology Operations Inc (GTO) and Saab, GM declined to license platforms and technology if any Chinese party participated in Saab’s ownership structure. To address this obstacle, Spyker and Youngman devised a plan whereby Youngman would provide a €200 million loan convertible into equity only after Saab ceased utilizing GM technology in its vehicles. Despite this arrangement, GM persisted in refusing platform and technology licenses essential for producing Saab cars in Trollhättan and threatened to terminate production of the 9-4X model at its Mexican plant if the deal proceeded. Ultimately, this led to deal failure and forced Saab into bankruptcy. Spyker contended that GM’s conduct was illegal. Since Saab remained under receivership until completion of a deal with Nevs, Spyker entered into an agreement with receivers whereby Spyker would cover litigation costs in exchange for receiving 90% of any successful claim proceeds.
2013
In June 2013, the district court ruled in favor of General Motors, dismissing the lawsuit and affirming GM's authority to prevent the sale. Saab had been acquired by National Electric Vehicle Sweden in June 2012, with production of the Saab 9-3 recommencing in December 2013.
2014
On August 28, 2014, a Swedish publication titled Saabs sista strid was released. This book details the history of Saab Automobile under the ownership of Spyker Cars and the events leading up to its bankruptcy. The author is Swedish financial journalist Jens B Nordström.
See also
References
- ↑ "Spyker buys Saab". autocar.co.uk. Retrieved 2010-01-26.
- ↑ "Spyker Cars finalizes the purchase of Saab". SaabsUnited.com. Archived from the original on 2017-04-16. Retrieved 2010-02-23.
- ↑ 22 March 2010. "Saab production resumes". Autocar.co.uk. Retrieved 2010-03-22.
{{cite web}}: CS1 maint: numeric names: authors list (link) - ↑ NRC Handelsblad, May 22, 2010, page 17:"[..]Antonov heeft mij voor honderd procent gefinancierd. Ik leende van hem de 74 miljoen dollar die wij voor de overname contant aan GM moesten betalen. Dat wisten de Amerikanen overigens ook.", English translation: "[..]Antonov financed me for hundred percent. I borrowed from him the 74 million dollar that we had to pay in cash to GM for the acquisition. The Americans knew this too."
- ↑ Nylander, Johan (2010-07-28). "Swedish carmaker Saab swings to profit". The Swedish Wire.
- ↑ "Saab Auto Signs Deal to Re-enter China; Spyker Soars". Bloomberg. 2010-12-20. Retrieved 2010-12-20.
- ↑ Kinnander, Ola (2010-10-29). "Spyker Drops as Saab Production Goal Cut, Loss Widens". Archived from the original on September 14, 2011.
- ↑ Aaron Gray-Block, Hans Peters (2011-01-06). "Spyker upbeat as Saab sales meet lowered 2010 guidance". Reuters. Archived from the original on 2011-01-31. Retrieved 2011-05-14.