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Trevor Collett | May, 22 2014 | 4 Comments

The production lines at Saab have ground to a halt once again, with new owner National Electric Vehicle Sweden (NEVS) facing what it has described as a “short term cash problem”.

NEVS said this week that a key investor in the re-born Swedish car brand, Qingbo Investment Co. Ltd, is yet to fulfil its contractual obligation to finance the operations.

As a result, National Modern Energy Holdings Ltd (NME, NEVS’ main owner) has decided to become the sole financier of the Saab project.

In the meantime, however, the lack of cash and a slower-than-expected response from China has resulted in a time-lag between Chinese financing and the mounting bills from parts suppliers.

Rather than retreat, NME has stepped up its commitment to China by investing AU$500 million in a new battery factory and technology centre.

“It is important to state that the assets are significantly higher than the debt, but NEVS is planning to use short-term credits to cover all outstanding and near-term obligations until the long term financing is secured,” NEVS said in a statement.

“This bridge solution is planned to be realised within the near future.”

NEVS said it will temporarily halt production – which currently stands at six cars per day – and reduce the number of hired consultants in the short term to lower costs.

It could soon be a case of ‘back-to-the-future’ for Saab, as NEVS has also announced the signing of a “frame agreement” with a major carmaker to cooperate in future development of Saab’s Phoenix platform.

On top of this agreement, NEVS says a second major carmaker is currently negotiating a deal for part-ownership of Saab, although NEVS has not revealed who either carmaker is at this stage.

MORE: Saab news and reviews

 
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