How far can the troubled Swedish brand, Saab, stretch $36 million? Not far enough, if a deal with two Chinese firms collapses. The story inside.
Saab has received yet another lifeline to keep operations up and running in the short term, this time thanks to a bridge loan from Gemini Investment Fund Ltd. The investment group issued a €25 million ($36.2 million) bridge loan to the belabored automaker, according to the Associated Press.
The move comes days after an announcement of a large Saab vehicle order by an undisclosed Chinese firm that added €13 million ($18.4 million) to company coffers, allowing the automaker to meet immediate payroll demands.
"I am relieved to report that we made the June salary payments this afternoon from the proceeds of the sale of cars we announced last Monday," said the chief of Saab parent Victor Muller. "We have clearly gone through a very rough patch in the past few weeks and hopefully we can now reach agreement with our suppliers so as to ensure a resumption of our production in a controlled way."
An AP report says the loan matures in six months, with a 10% interest rate, and no pre-payment penalty. Saab's parent company, the Dutch firm Swedish Automobile NV, would likely pay the money back if approval for an investment by two Chinese companies is granted.