On the block
Calcutta, Dec. 31: Mahindra and Mahindra (M&M) is reported to have set its sights on bankrupt Swedish car maker Saab Automobile.
Reports suggest that M&M could be in the process of setting up meetings with two court-appointed administrators who are overseeing Saabs bankruptcy and M&M could look at buying a stake in the firm.
M&M, however, is tightlipped on these developments. Pawan Goenka, president — automotive of M&M, told The Telegraph, I would not like to comment on these reports.
This would not be the first time M&M could be involved in an overseas purchase. In the last few years, the company had acquired Korean car maker Ssangyong for $368 million and forged an alliance with US truck maker Navistar.
In its efforts to diversify, M&M had also picked up a stake in electric car maker Reva and has also bought back its stake from its joint venture with Frances Renault.
Saab was originally part of General Motors (GM). However, in 2010, GM sold the company to Dutch sports car maker Spyker Cars NV, which later changed its name to Swedish Automobile NV. However, GM continued to provide technology to Saab.
Saab filed for bankruptcy early in December after running out of cash and after a nine-month battle with Swedish Automobile. The company had stopped production in April and suffered a $263-million loss in the first half of 2011.
In October, reports suggested that Chinese car maker Youngman and automotive retailer Pang Da had jointly agreed to a $40-million takeover of Saab.
Following that, GM had announced that it would not continue to support Saab because of its alliance with the Chinese counterparts. As a result, Saab started working on setting up a new proposal that did not involve a Chinese partner as the majority stakeholder.
The company said, After having received the recent position of GM, Youngman informed Saab Automobile that the funding to continue and complete the reorganisation of Saab Automobile could not be concluded. The board of Saab subsequently decided that the company without further funding would be insolvent and that filing bankruptcy was in the best interests of its creditors.
Saabs court-appointed receivers Hans Bergqvist and Anne-Marie Pouteaux said in a statement they had met a number of Swedish and foreign players who have expressed interest in a possible purchase of all or parts of the business.
Traditionally, all Saab variants start with the number nine. Before stopping production, the company used to make 9-3 and 9-5 sedan and SUV variants.