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2011-04-13 11:25

MONEY DASH: Spyker continues to scramble for funds to keep the loss-making Saab afloat.

AMSTERDAM, The Netherlands - Loss-making Dutch carmaker Spyker is racing to gain funding to pay its suppliers and restart production of Saab cars to stave off uncertainty ablout its viability that could hurt sales.

Spyker, which bought loss-making Saab from General Motors in 2010, has halted production several times through April 2011 because it is unable to pay its suppliers but has said it is facing a short-term liquidity crunch rather than collapse.

Consulting firm AEK's analyst Martin Krum said: "They can't keep production stopped for a long time. If they can't produce, they can't sell cars and then they can't get income and won't survive.
"I think they will find a solution, but I can't pinpoint how much time they have left ... time is the big negative, this has to be dealt with swiftly."


Rescued from looming closure last year, Saab sold 30 000 cars in 2010 compared with almost 95 000 in 2008 and is hoping under new owner Spyker to ignite sales growth in combination with the launch of its new model, the 9-5.

Battling a liquidity problem, however, Spyker and Saab Automobile said they are talking with several parties to gain short and medium-term funding for Saab.

Spyker has asked the Swedish National Debt Office (NDO) to release collateral in the form of Saab's property so that it can use this to obtain new funding.

Despite the urgency of Spyker's situation, the NDO was unable to say when it would reach a decision on the matter.

NDO spokesman Unni Jerndal said: "The work is ongoing. We can't see that we can set any deadline, but we are working at top speed. We are working at finding financial solutions."

Theodoor Gilissen analyst Tom Muller said the negative publicity around the company could hurt its sales and Spyker needs to seal a final solution to solve its cash-flow problems.

"If you want to buy a car from a company and you cannot be sure that it will continue to exist, it won't help sales," Muller said.

To bolster its finances, Spyker is focusing on Russian businessman Vladimir Antonov, who has submitted an application to take a stake in the loss-making car manufacturer.

Any investment from Antonov, however, must be approved by the Swedish National Debt Office, which guaranteed a European Investment Bank loan of 400 million euros to Saab Automobile.

Spyker is also in talks with US and European banks about refinancing and increasing the existing EIB credit facility.

When operating at full capacity, Saab makes about 200 cars a day. But the factory, which employs about 1200 production workers, has had a series of rolling stoppages this month.

The company said once it has obtained funding to pay outstanding debts with its suppliers, Saab Automobile expects it will be able to resume normal production within a week.


Spyker is trying to sell and lease back Saab's real estate to raise cash, but added this was one of the funding scenarios Saab is currently working on and it expects to be able to come up with more details before Thursday, April 15, 2011.

A suppliers' group has said companies are owed tens of millions of crowns by Saab, and Dutch newspaper De Telegraaf reported that Saab's monthly tax payment is due on April 15, 2011, while wages are due in two weeks' time.

Modern car factories operate on a "just-in-time" delivery basis and do not have warehouses of parts stored on site which means they are particularly vulnerable to any halt in supplies.

"It always takes some time to resume production when you've had a stop," spokesman Eric Geers said.

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