Jump to content
Sign in to follow this  

Beijing Auto, Merbanco, Renco Said to Approach Saab

Recommended Posts

Beijing Auto, Merbanco, Renco Said to Approach Saab (Update2)

By Serena Saitto, Ola Kinnander and Jeff Green

Nov. 27 (Bloomberg) -- Beijing Automotive Industry Holding Co., Merbanco Inc. and Renco Group Inc. have made approaches about General Motors Co.’s Saab unit after a sale to Koenigsegg Group collapsed, two people familiar with the situation said.

No written proposals have been submitted and any new bids or other options for the Swedish unit will be reviewed by Detroit-based GM’s board at a meeting on Dec. 1, said one of the people, who asked not to be identified because the discussions are confidential.

Koenigsegg said Nov. 24 it pulled out of talks to acquire Saab, saying it ran out of time to complete the transaction. Beijing Automotive was a partner in the investor group. While GM directors might opt to keep Saab, as they did with the Opel division this month, GM has a contingency plan that calls for winding down the brand, people familiar with the plan have said.

“Saab’s future is uncertain,” said Koji Endo, managing director of Advanced Research Japan, a Tokyo-based equity research company. “It may remain if there are buyers or some kind of support from governments, or if GM keeps it. Otherwise, the brand will disappear.”

Beijing Automotive said Nov. 25 it will “cautiously” reconsider plans to buy a stake in the unprofitable Swedish carmaker. A Beijing Auto spokesman declined to comment.

‘Last Chance’

Merbanco is a Wyoming-based investor group. President Christopher Johnston said in an interview yesterday that Merbanco would be willing to help Saab. When asked whether that could include acquiring a majority stake in the carmaker, he said: “that could be one way.”

“I do not believe that the company should be closed,” Johnston said. “Whoever buys Saab, or if GM keeps Saab, there’s a lot of work ahead but I believe that the company should survive.”

John Dillard, a spokesman for Renco, owned by billionaire Ira Rennert, didn’t return a phone call. Chris Preuss, a GM spokesman, declined to comment.

“We don’t have much time, and if someone is interested, things have to happen fast,” Eric Geers, a Saab spokesman, said by telephone today, adding that Saab is in “close contact” with “a few” interested parties. “This is our last chance. Now everyone has to move in the same direction.”

Koenigsegg’s pullout thrusts Saab in jeopardy again after the automaker sought protection from creditors in February following a decision by GM to cut it off by year-end. Saab, which exited reorganization in August, had expected the sale to be completed by the end of this month, allowing fresh funds to finance a ramp-up of production of older models and start production of new car types.

Chinese Automakers

The collapse marked another setback for Chinese automakers’ attempts to expand overseas by purchasing established brands. Beijing Auto was rebuffed by GM in July when it bid for Ruesselsheim, Germany-based Opel. SAIC Motor Corp., China’s biggest domestic automaker, bought control of South Korea’s Ssangyong Motor Co., only to have the unit go into receivership after sales plunged.

Saab is retooling its Trollhaettan, Sweden plant to begin production of the 9-5 sedan, the company’s first new model in seven years, by the end of this year. The carmaker reported a 59 percent slump in European sales and a 62 percent drop in the U.S. in the first 10 months of 2009.

“Our belief in Saab and its products remains, but if Saab can’t do business, it simply doesn’t work,” Svenska Dagbladet reported, citing Christian von Koenigsegg, one of the investors in Koenigsegg Group. “Saab doesn’t have liquidity for more than a couple of weeks more.”

Aerospace Heritage

The Swedish government has ruled out taking over Saab to keep the company and its suppliers afloat. Saab’s survival hinges on a new private buyer, Joeran Haegglund, state secretary at the Industry Ministry, said Nov. 24.

Merbanco was among suitors that lost the bidding in June to Koenigsegg, a person familiar with the process said at the time. Renco had also expressed interest.

Saab traces its roots to aircraft company Svenska Aeroplan AB, founded in 1937 to secure production of Swedish warplanes. The first car left the factory a decade later. GM bought half of Saab in 1990 and took full ownership a decade later.

Share this post

Link to post
Share on other sites

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets


  • Create New...