Interest in Saab Grows

The whole situation going on at GM is turning into an absolute circus! Something as colossal as GM is spread all over the world, and that requires many negotiations to be conducted with individual governments on national, state and local levels. It's crazy the complexity of the whole situation. In the middle of all of this the parent company GM is trying to negotiate with creditors while at the same time preparing for a possible bankruptcy. Stress? You have no idea. It's like running a country!

One of the particularly unusual things about the situation is the way the different factions of GM are treating each other. GM Headquarters is at odds with it's different arms and subsidiaries!  A new report has come out in Bloomberg regarding the sale of the Saab brand. Over 27 buyers are potentially interested, an larger number then previously reported. There has been an increase of interest in the brand, with buyers that include car companies and private equity spanning the continents.

GM only views 12 buyers as serious though, with an wealthy individual investor, a consortium of private Swedish companies and various private equities. Surprisingly, none of the likely or serious bidders are other car manufacturers. I guess that would be good news for General Motors.

Hopefully whoever ends up with the company has deep pockets and a long-term vision. Saab's Greer says that is the requirement for any potential buyer. Saab will be in consultation with Deutsche Bank AG and General Motors on any potential buyer.  A reorganized Saab under new ownership is counting on $1 billion in loans from the European Investment Bank (EIB) to help it achieve profitability by 2011.

Saab is counting on it's upcoming 9-4X and 9-5 models, and plans to focus on four. The company needs to make 130,000 cars a year to break even. That goal has proved elusive for the company under it's many years of GM ownership, but hopefully Saab could hit it with a focused, determined effort.

Given the fact that GM has spun Saab off as a separate unit under bankruptcy, it has listed all it's investment in the company as debt. Therefore GM is a Saab "creditor". GM is likely to write down 75 percent of that debt, as specified in the Saab restructuring plan. GM will be retaining some claim on it though, as it is being pressed by the U.S government to cut debt and raise capital.

“I don’t see the writedown as an issue or hindrance at all,” Greer said. “Talks with GM are proceeding in a great way.” Wow, GM really has left them to fend for themselves.