The largest SUV manufacturer of India, Mahindra and Mahindra has developed interest in acquiring at least a part of Saab Automobile, the auto maker from Sweden, which has recently gone bankrupt. This has been disclosed by two people, who are very familiar with this situation.
Mumbai based Mahindra are initiating processes of setting up meetings with the two operators, who have been appointed by court for overseeing the bankruptcy proceedings of Saab with the aim of buying a share of the company or if possible, acquiring the total company. On condition of anonymity, people in the company have disclosed that Mahindra has not been able to meet the administrators yet for starting discussions.
Mahindra spokeswoman, Roma Balwani did not wish to comment on this issue, whereas the company CFO Bharat Doshi expressed his unavailability to comment as he was tied up in meetings.
Saab Automobile filed bankruptcy proceedings on the 19th of December as it was draining out its cash reserves. The company initially stopped producing cars from March as it had not been able to pay its suppliers. CEO of Saab, Victor Muller had said a month back that a lot of companies had shown interest in the company and it still had a fighting chance to evolve from this crisis.
According to one of the two persons, a company from Turkey had expressed interest to invest in Saab. This is because the government in Turkey has the desire that the country has a self-owned car brand and hence is showing active interest in helping this manufacturer acquire at least a part of Saab.
The two attorneys, who are handling this bankruptcy issue, Anne-Marie Pouteaux and Hans Bergqvist have so far not commented on this issue.
Mahindra had earlier in 2011 purchased 70% stake in the Ssangyong Motor Company making a payment of $368 million. The company has made this huge investment with the hope of benefiting from the high technology and also the huge international network of sales that Ssangyong had.
SAIC Motor Corporation has been previously controlling Ssangyong and had to seek protection from bankruptcy in the month of February 2009 after suffering huge losses due to the plunging sales of its SUV. After Mahindra has taken control over the company, the automaker declared in the month of March that the company is going to spend around $208 million on developing new products.
Investments made by Mahindra:
Mahindra, the company that is known for its vehicles like Xylo and Scorpio, has also been able to buy the stake of Renault SA in its venture for making sedans in the Indian market. It has also taken control of the Bengaluru based company Reva Electric Cars, in a bid to increase its range of automobiles.
Before Saab had been declared bankrupt, its CEO Muller was trying to secure a loan of 600 million Euro from Chinese banks as well as Zhejiang Youngman Lotus Automobile company. This move was after the company had failed in an earlier attempt to secure a partnership with Youngman as well as the auto dealer named Pang Da Automobiles.
Saab has a team of around 3,600 employees, of which 3,400 are employed at its main plant and its offices that are based in Trollhaettan. The government of Sweden is going to pay the salaries of these employees for a limited period as per the law of bankruptcy that is followed in the country.
The roots of this company can be traced back to the time when the aircraft manufacturing company called Svenska Aeroplan AB had been established in the year 1937. It, however, started building cars only 10 years after that. The automobile business separated out from its aerospace operations (which is now known as Saab AB) during the 1990s. General Motors secured a stake of 50% in the company in the 1990 and assumed total control from 2000 onwards.
