Saab owner Spyker Cars today reported a first-quarter net loss of 72 million euros ($107 million) and warned it was unlikely to meet its 2011 production target with all the production at a standstill as it looks for way to raise cash to pay suppliers. The company also said it is talking with Chinese companies about a possible investment in Saab.
Spyker Cars said that March 2011 was the best sales month for Saab Automobile since becoming independent company. Saab sold 9,393 cars (retail) in Q1 2011, up 93% compared to 4,874 in Q1 2010. Now that may sound wonderful, but the second quarter isn’t looking so good.
Here is what Victor R. Muller, CEO of the Group and Chairman of Saab Automobile, said:
“Although we have continued to make good progress during the first three months of 2011 on many fronts, in what is the second build-up year towards becoming a profitable independent premium car manufacturer, we have experienced painful production stoppages as of late. Everybody at Saab Automobile continues to work hard so as to solve these issues as soon as practically possible allowing us to move forward to establish a successful company. We have made a serious endeavour to carve out the Saab owned real estate from the collateral Saab provided to the National Debt Office (NDO) as security for the € 400 million loan from the European Investment Bank (EIB). By reducing the collateral value by € 67 million that loan would be reduced by no less than € 120 million to € 280 million. In spite of consent from NDO we have yet to reach agreement with EIB on the terms of their consent to this transaction.
In the mean time we have opened up alternative routes to fund the company mid- and short-term including but not limited to discussions with Chinese car manufacturers, the discussions with some of which had already been ongoing for several months. We are hopeful that these discussions will result in a solution very shortly so we can resume production. We will make it our top priority to restore the confidence of our suppliers, dealers and partners and apologize to them as well as to our dedicated employees for the disruptions that occurred.
It is unclear at this time what the consequences of the recent production stoppages and funding issues will be for our full year 2011 forecast but it is realistic to assume that realizing our 80.000 cars sales forecast is no longer feasible .”
– By: Omar Rana