Factory sale may hold key to Saab’s future

Talks will continue over the weekend between Saab and real estate company Hemfosa in the latest bid to save the ailing carmaker.

Factory sale may hold key to Saab's future

Saab representatives hope that the sale of the factory premises will bring in a vital cash injection which would allow them to get production running again and pay staff salaries.

Should a sale go through, it could raise up to 300 million kronor ($46.1 million) and provide a vital lifeline for the company. Staff were told the day before Midsummer that they would not receive their monthly salary on Monday.

“I cannot say anything more than that we’re working on it,” said Saab spokesperson Gunilla Gustavs.

It had been hoped that the sale would be concluded before the salary run, but it soon became evident that it wouldn’t be the case as the negotiations dragged on. Hemfosa leads a consortium, including insurance giant Folksam and The Fourth Swedish National Pension Fund (Fjärde AP-fonden).

Jens Engvall, president of Hemfosa, told Dagens Industri, “It is a difficult matter and we need to get an idea of ​​how credible it is that Saab will survive in a reasonable way. We also need to understand how the agreement with Pang Da and Youngman looks and how the EIB system works. This has meant that it took a little longer than a normal real estate business”.

Meanwhile, on a more positive note, a representative of Da Pang said in an interview with Bloomberg News that the company is still willing to go ahead with the deal with Saab.

“Our previous plans will not change. Saab has temporary financial difficulties but the problems are not fundamental,” said Wang Yin, secretary of the board of Pang Da.

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VW Scandal: France to launch ‘in-depth’ probe

Update: France's Environment Minister Segolene Royal on Tuesday announced an "in-depth" investigation after Volkswagen admitted millions of cars were fitted with software that secretly thwarts pollution tests in the US.

VW Scandal: France to launch 'in-depth' probe
"This is not a minor subject, it's not about speed or the quality of leather," said the French finance minister of the VW scandal. Photo: AFP

Royal also asked French manufacturers to “ensure that such schemes are not taking place in France.”

Her announcement came after Michel Sapin on Tuesday morning told French radio that in order to “reassure” the public, it seemed “necessary” to carry out checks on cars manufactured by other European carmakers.

“We are in a European market, with European rules that need to be respected,” Sapin told Europe 1 radio.

“Even if it's just to reassure people, it seems necessary to me that (checks should be carried out) also on French carmakers,” he said, adding he had no “particular reason” to suspect wrongdoing.

According to US authorities, VW admitted that it had equipped about 482,000 cars in the United States with sophisticated software that covertly turns off pollution controls when the car is being driven and turns them on only when it detects that the car is undergoing an emissions test.

With the so-called “defeat device” deactivated, the car can spew pollutant gases into the air, including nitrogen oxide in amounts as much as 40 percent higher than emissions standards, said the US Environmental Protection Agency.

“This is not a minor subject, it's not about speed or the quality of leather,” stressed Sapin.

“What we are dealing with is making sure people avoid being poisoned by pollution,” said the minister.

German authorities have already announced an investigation into whether Volkswagen or other carmakers are doing anything similar in Germany or Europe.