Buyers line up to kick Saab tyres

FRIDAY is D-day for struggling Swedish car company Saab, which is wooing a financial white knight to invest in its future.

Saab chairman Jan-Ake Jonsson said at the Geneva motor show that so far, the company had identified five bidders and wanted to check out two others.

“We should see which candidates are serious (by the end of this week),” he said.

Only half the potential buyers are already in the car industry. With no cheap financing available for a private equity fund purchase, it looks like Saab is attracting interest from governments and non-automotive companies.

Saab has been cut free by its parent General Motors, which has indicated it can no longer finance Saab and is prepared to let it fall into bankruptcy as part of the viability plan GM lodged with the US Government.

GM has set a deadline of January 1, 2010 to sever its relationship with Saab.

Jonsson did not give details about which companies had expressed interest in Saab.

However, Chinese manufacturers Geely Automobile and Dongfeng Motor Group – both touted as possible buyers – have both denied any interest.

Although Saab has been losing money constantly under GM’s stewardship, the company did have some inherent value, according to a financial market analyst.

“They’ve got great, loyal customers,” said Rebecca Lindland, of IHS Global Insight, told the Detroit Free Press.

“Unfortunately GM did not cultivate them or understand their value.” GM has, however, already funded the development of two new models, the 9-5 and the 9-4X.

Mr Jonsson was confident the Swedish Government would advance sufficient funds to give Saab enough time to re-organise itself and find a new owner.

“We have committed to carving out Saab from GM and finding a new owner,” he said. “We need to get this done as quickly as possible. We need to sort out our financing and future ownership.” He acknowledged that Saab’s relatively small size, and the high cost of developing new models, meant Saab would have difficulty going it alone.

“In today’s auto industry, there are many more co-operative projects between manufacturers without ownership,” he said.

“I trust that, going forward, we’ll have lots of different relationships with many different automakers.” Jonsson said that, once Saab was separated from GM, it would redefine its image with a sharper focus on traditional Saab characteristics like safety and small, efficient engines.

“There will be a lot of people cheering the day we become independent,” he said, alluding to Swedish sentiment for Saab.

GM bought 50 per cent of Saab in 1990 for $US700 million ($A908 million) and paid a further $US125 million ($A196 million) in 2000 and assumed Saab’s debt.

Saab lost $US340 million ($A491 million) in 2008 and indicated losses would be similar for 2009, citing weak demand, overcapacity, old models and high costs.

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