Spyker's Saab restarts production as Pangda visits
By Niklas Pollard and Greg Roumeliotis
STOCKHOLM/AMSTERDAM | Fri May 27, 2011 5:56am EDT
(Reuters) - Struggling Swedish carmaker Saab restarted production on Friday, in time for a first visit by would-be Chinese partner Pangda (601258.SS) and after a seven-week shutdown due to a cash crunch.
Loss-making Saab was pushed to the brink of collapse after running out of cash to pay suppliers in early April, halting production on April 5 and leaving Dutch owner Spyker Cars (SPYKR.AS) scrambling to line up new financing.
"Production has restated. Saab will make 100 cars on Friday and will reach a normal level of production of 218 cars on Monday," Spyker chief executive Victor Muller told Reuters.
Spyker shares were up 9.3 percent at 3.60 euros at 5:40 a.m. EDT, the largest gainer on the Amsterdam bourse.
The automaker, in intense negotiations with suppliers in recent days, had said on Thursday agreements had been reached with a sufficient number to allow for a resumption of output from its plant in Trollhattan, in southwest Sweden.
Spyker said that as Saab's assembly line was fired up, the total number of outstanding orders worldwide for its Trollhattan factory amounted to over 6,500 cars. The total order bank, including Pangda orders, was 8,100 cars.
"Given the complexity of re-establishing our supply chain there will most likely be some hiccups during this start-up phase, but we will work hard together with our suppliers to minimise any disruptions to production in the coming weeks," Saab vice president Gunnar Brunius said.
Spyker has chased a variety of solutions to resolve the cash crunch at Saab, bought last year from General Motors (GM.N), but has had to wait for approvals from Swedish authorities and the European Investment Bank under the terms of an outstanding loan.
Chinese car distributor Pangda is waiting for regulatory approval at home for its planned rescue of Saab in a deal worth up to 110 million euros ($156 million).
"All the approvals needed, included those from China, could take weeks and weeks. But we have no concerns. We will secure all the permits that are needed," Muller said on Friday.
Pangda, whose chief executive Pang Qinghua visited the Trollhattan plant for the first time on Friday, has already provided Spyker with an advance payment of 30 million euros in exchange for 1,300 Saab cars to be sold in China.
Pang also met Sweden's industry minister and the Debt Office on Thursday. Sweden has guaranteed an EIB loan to Saab, so has to agree to any shareholder changes, as does the EIB and former owner GM.
(Editing by Mike Nesbit and Dan Lalor)
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