Bloomberg News

Saab Auto Must Pay Debt to Avoid Collections, Regulator Says

August 16, 2011

(Updates with parent company’s share price in fifth paragraph, withdrawal from Frankfurt auto show in seventh.)

Aug. 16 (Bloomberg) -- Sweden’s Debt Enforcement Agency will start collection proceedings against Saab Automobile tomorrow unless the cash-starved carmaker pays two suppliers about $620,000 today, an official at the regulator said.

“The collection process that may start tomorrow would include investigating Saab’s bank accounts and potentially also other assets,” which could mean freezing them pending payment, Hans Ryberg, a division chief at the state agency, said today by telephone from his office in the town of Uddevalla.

Saab must pay Kongsberg Automotive AB, a Norwegian manufacturer of car-seat parts, and Infotiv AB, a Gothenburg, Sweden-based consulting firm, today to prevent the procedure from starting, Ryberg said. The “big majority” of the money is owed to Kongsberg, he said.

The automaker, whose models include the 9-3 and 9-5 cars, was forced to halt production in late March because of a cash shortage, and the assembly line has been quiet since early June. Saab is trying to raise more funds and has said it aims to restart manufacturing in a few weeks. Swedish Automobile NV, Saab’s Dutch owner, raised money yesterday by selling 4 million new shares to GEM Global Yield Fund Ltd.

Swedish Automobile fell as much as 6.3 percent to 98 cents and was down 4.4 percent as of 4:04 p.m. in Amsterdam trading. The stock has plunged 72 percent this year, valuing the Zeewolde, Netherlands-based company at 22.2 million euros ($32 million).

‘Totally Aware’

“We’re of course totally aware of this situation with the collection agency, but I can’t comment on what we’re going to do,” Eric Geers, a spokesman at Trollhaettan, Sweden-based Saab Auto, said by telephone today.

Saab is pulling out of next month’s Frankfurt auto show to focus on restarting production, Geers said.

“It’s a very important show, but this time we’re skipping it,” Geers said. “It’s just a matter of priority.”

Joachim Magnusson, head of Kongsberg’s auto division, and Hans-Jorgen Morland, a spokesman at the Norwegian company, didn’t immediately reply to two voicemail messages seeking comment. Infotiv Chief Executive Officer Alf Berntsson didn’t immediately reply to a message left with a secretary, whose phone wasn’t answered during a follow-up call.

More than 100 debt claims against Saab have been filed with the collection agency, with some companies filing more than one claim, and eight proceeding to ask for the regulator’s involvement, Christina Lindberg, another agency official, said last month. Ryberg said he doesn’t know the total amount that Saab owes. Another 5.1 million kronor ($794,400) is due to more suppliers in about a week, he said.

The collection process usually takes from one to three months, and can be halted in the event Saab pays the debts involved, Ryberg said. At the end of the procedure, the Swedish Tax Authority can request that Saab be put into bankruptcy in the absence of payments, he said.

--Editors: Tom Lavell, Robert Valpuesta

To contact the reporter on this story: Ola Kinnander in Stockholm at okinnander@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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