Group of Saab creditors demand debt be paid

AP News
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Posted: Jul 26, 2011 1:30 PM
Group of Saab creditors demand debt be paid

Automaker Saab's recovery efforts were dealt a setback Tuesday after Sweden's state-controlled debt collector announced that a group of creditors has demanded its money back.

In addition, the automaker said it was forced to delay salary payments to some 1,600 white-collar workers since the company has yet to receive funds committed by investors.

Cristina Lindberg, an official with Sweden's debt collection agency, said the agency reviewed 42 debt cases on Monday involving Saab and "eight of these companies asked (the agency) to start collecting money from Saab."

She could not specify the size of the debt, though she did say the agency next week would begin searching which ways it might be able to recover the debt.

"It's a shame that it's come this far, but we're doing our best to come to an agreement with various suppliers directly," said Saab spokeswoman Gurilla Gustavs, adding that the eight companies were suppliers of either components or services.

She described the delayed salaries as "unexpected" and "regrettable."

"We're doing our very best to correct the situation," Gustavs said. "We have had a commitment that money should be coming in, and the reason we can't pay the salaries to workers is that the money has not been received by Saab."

Earlier this month, the Swedish government approved a deal that would allow Saab to sell some $40 million in property _ previously frozen as collateral for a loan _ that would give the company an injection of working capital.

The company is hoping that the deal will allow it to restart production this summer. But as Gustavs explains, "When it comes to production start there are roughly 800 suppliers that you need to get on board and committed to a delivery schedule."

Many of the suppliers are small firms with staff on vacation, complicating the timely delivery of components.

The company has twice postponed production starts this summer and is now targeting end-August for kick-starting work on the assembly line.

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Gary Peach in Riga, Latvia, contributed to this report.