Swedish govt approves Saab's $40 mln property sale

AP News
|
Posted: Jul 07, 2011 6:57 AM
Swedish govt approves Saab's $40 mln property sale

Automaker Saab received final government approval Thursday for the $40 million sale of property that it hopes will inject enough cash into its business so it can restart production at a factory that has been idle for months.

The government had been using the property as collateral to guarantee a loan to Saab from the European Investment Bank. It has now agreed to no longer count the property as collateral, allowing Saab to complete the sale of a 50.1 percent stake to real estate company Hemfosa. Saab plans to then lease the property back.

The sale includes Saab's plant in Trollhattan, southwest Sweden, where production has been at a standstill for months because a cash shortage left the company struggling to pay suppliers and staff.

Saab on Thursday postponed the expected restart of production to Aug. 9, citing the longer lead times required by some suppliers and the two-week scheduled vacation for factory workers, starting July 25.

It had previously said it hoped to resume production next week.

However, Saab-owner Swedish Automobile said it is "close to reaching agreements" with suppliers.

It also said it continues to search for more short-term funding to be able to sustain production.

Shares in Swedish Automobile traded flat Thursday at euro2.84 ($4.08) on the Amsterdam stock exchange.