The owner of cash-strapped carmaker Saab which is scrambling to pay workers and restart production, said an investment fund will take a substantial stake following a new share issue. Hit the jump to read the rest of the story.
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The Swedish car manufacturer has moved from one cash crisis to another in recent months and was forced to halt production at its factory in April because its suppliers refused to deliver parts until their bills were settled.
In recent months, it has announced new funding plans with Chinese partners and existing shareholders in a bid to prevent bankruptcy.
But the new share issue, announced on Wednesday, is unlikely to buy Saab much time: based on the current share price, it would raise just under 7 million euros.
“Let’s assume they get around 6.5 million euros from this sale looking at where the share price is. They need at least 50 million euros to pay suppliers and get things started again. They have much more to do,” said Tom Muller, an analyst at Theodoor Gilissen.
Swedish Automobile said GEM Global Yield Fund Ltd. will acquire about 5 million new shares in the Amsterdam-listed company, giving it a 17 percent stake.
Swedish Automobile said it has issued a subscription notice for the shares under a 150 million euro equity facility which was set up in early 2010.
Just last month, Saab managed to fend off a bankruptcy claim by settling with a supplier, but within days it announced it was unable to pay almost half its workforce because some of the funds committed by investors had not been paid in time.
On Wednesday, it said it expected to be able to pay the wages of its white-collar workers this week.
