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Chinese Order Could Help Saab Pay Its Employees

Mon, 06/27/2011 - 4:20am
Malin Rising, Associated Press

STOCKHOLM (AP) — Troubled car maker Saab Automobile AB has received a euro13 million ($18.4 million) car order from a Chinese company that could help pay this month's salaries, its owner Swedish Automobile AB said Monday.

The company, previously known as Spyker Cars, claimed the deal with an unnamed Chinese company would provide the ailing car brand with enough funds to also pay back parts of its debt to suppliers.

Last week, Saab said it had run out of cash to pay its 3,700 workers, raising doubts over how long the brand could survive.

Saab spokesman Eric Geers on Monday said the company hopes a prepayment from the Chinese company for the cars will allow it to pay the salaries, which were due last Friday, this week.

Swedish Automobile, which bought Saab from General Motors Co. last year, said it continues to hold talks with several parties to raise more cash for the brand. Among other things, it is in talks to sell and lease back Saab's real estate.

Shares in the company rose by 22.8 percent to euro1.20 ($1.70) on the Amsterdam Stock Exchange.

The company's message Monday wasn't enough to calm concerns among unions and suppliers about the future of Saab.

Hakan Skott, chairman of metalworkers union IF Metall, said his organization is still working toward filing a payment request to Saab this week, demanding the company to "react" within seven days.

And the Swedish Enforcement Authority said it received a payment claim Monday of nearly 45 million Swedish kronor ($6.9 million) against Saab from the supplier International Automotive Components.

The authority's spokesman, Fredric Orloff, said it is the biggest claim so far against Saab, out of a total of 68 filings.

Separately, Geers said two union members and Saab's General Counsel Kristina Geers have resigned from the board of Saab Automobile, leaving Swedish Automobile CEO Victor Muller as the only board member.

"We very much regret the current cash shortage which is causing undeserved hardship to all and we are working relentlessly to resolve the current situation," Muller said.

Muller said Russian businessman Vladimir Antonov is still interested in investing in Saab, but he has so far failed to receive the necessary approval from the European Investment Bank.

"Antonov can provide much needed financing and/or capital to Swedish Automobile/Saab Automobile at this critical time," Muller said. "We are pushing hard to obtain this vital clearance as soon as practically possible."

EIB spokesman Par Isaksson declined to comment on the bank's review of Antonov, saying only that it examines all proposals to change the lending agreement thoroughly.

Antonov has previously said he is prepared to invest between $50 million-$150 million in Saab. He was forced out of Spyker as part of its deal with GM amid reports of money laundering. He has denied those allegations and has never been charged.

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