Saab’s owner Swedish Automobile said Wednesday it had secured more short-term funding with a 25-million-euro ($36-million) loan and that it has paid its staff’s salaries for June.
“Swedish Automobile announces that it entered into a 25 million euro convertible bridge loan agreement with Gemini Investment Fund Limited, thereby securing additional short-term funding,” it said in a statement.
The deal is the third cash injection to Saab this week, for a total of 66 million euros, following a 13-million-euro Chinese order on Monday and a 28-million-euro deal reached Tuesday to sell and lease back its real estate.
If the funds are paid out as scheduled, “Saab Automobile expects to have secured the liquidity required to restart production hopefully within 2 weeks, subject to reaching agreement with its suppliers which includes feasible delivery schedules,” said the brand’s Dutch owner, formerly known as Spyker.
The announcement sent Swedish Automobile’s shares soaring nearly 55 percent to 1.89 euros on the Amsterdam stock exchange.
Saab has been faced with a mounting liquidity crisis that has repeatedly halted its production line as suppliers stopped deliveries over unpaid bills.
The current stoppage started on June 8. In April and May, the Saab plant in the Western city of Trollheattan stood still for seven weeks.
Last week, the beleaguered carmaker announced it had run out of cash to pay its 3,700 employees’ salaries for the month of June.
“I am relieved to report that we made the June salary payments this afternoon from the proceeds of the sale of cars we announced Monday,” Swedish Automobile head Victor Muller, who is also Saab’s sole board member, said Tuesday, apologising to employees.
“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,” he said.
Unions had threatened to force Saab into bankruptcy if salaries were not paid out by Thursday.
“It feels great,” Anette Hellgren of the Union union told Swedish news agency TT Wednesday, warning “it’s clear there is a need for more than just salary money.”
“Now the company can start discussing with suppliers and get going, that’s what we want,” she said.
The loan Saab received Tuesday has a six month maturity and at annual interest rate of 10 percent. Its conversion price is 1.38 euros per share, Swedish Automobile said.
The loan can be redeemed at any time without penalty and the company plans to do so once it has received funds from Chinese car distributor Pang Da and manufacturer Zhejiang Youngman, with which it announced tie-ups earlier this month.
“Our mid and long-term funding is secured by the Pang Da/Youngman agreements which are still subject to obtaining certain governmental approvals. Assuming these approvals are obtained, the Gemini bridge loan will be repaid in full,” Muller explained.
Saab was rescued at the last minute in 2010 when auto industry minnow Spyker bought the brand from US auto giant General Motors for $400 million.
The new owner had big ambitions for Saab but the carmaker has since then lurched from one cash crisis to another.