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Sweden’s Saab in contact with 20 potential buyers

STOCKHOLM – Saab Automobile, the troubled Swedish unit of General Motors Corp., has been contacted by some 20 potential buyers, with a sale planned in June, the car maker’s lawyer said Monday.

Lawyer Guy Lofalk, in charge of restructuring Saab, said a sale of the company is a “crucial prerequisite for a successful reconstruction.”

“Extensive contacts have occurred with interested parties,” he said in a court document presented on Monday to creditors in the Vanersborg District Court.

Saab’s chief executive Jan Ake Jonsson told Swedish news agency TT that the interested parties, from Sweden and abroad, include industrial firms and investment companies. He gave no other details.

Saab went into bankruptcy protection on Feb. 20 in an effort by GM to spin off or sell the unit. The danger of collapse still hovers over the ailing brand because neither GM nor the Swedish government appears ready to provide enough money to help it survive.

Monday’s court hearing gave creditors a chance to challenge the restructuring process, but all agreed to continue it. The court ruled that bankruptcy protection could be extended until May 20, and Saab has said it will apply for a further extension.

Lofalk said Saab plans to start negotiations with creditors in June to write down non-prioritized debt of 10.6 billion kronor ($1.3 billion) by some 75 percent. Saab expects to pay the remaining 25 percent within a year.

Lofalk told TT that Saab owes about 9.7 billion kronor ($1.2 billion) to GM and 347 million ($43.7 million) to the Swedish state.

By improving efficiency and concentrating production at the plant in Trollhattan in western Sweden, the company aims to break even with a production of some 130,000 cars, he said. The planned launch of three new models in 2009 and 2010 is expected to help increase production.

“Saab counts on a positive cash flow already in 2011 as well as a good return with a production of 150,000 cars,” Lofalk said.

In 2008, Saab made 93,000 cars.

Lofalk said Saab needs financing of some $1 billion, with $600 million expected to come from the European Investment Bank. The remaining $400 million is expected to be paid by GM, partly through writing down debt and partly by supplying tools for manufacturing Saab’s new car models.

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