Mahindra & Mahindra, India’s largest utility vehicle manufacturer, may buy a part of bankrupt Swedish carmaker Saab Automobile. According to reports, M&M may acquire a part or the whole company as it is organising meetings with two court-appointed administrators who are supervising Saab’s bankruptcy. Upon being asked about this, Pawan Goenka, President, Automotive, M&M, refused to comment.
M&M has recently acquired a 70 per cent stake in Korean SUV maker Ssangyong for $368 million. The company has also bought a majority stake in electric car marker Reva and stepped back from its joint venture with Renault for Logan.
VG Ramakrishanan, Vice-President, Frost & Sullivan, said “M&M as a company has been wise in many of its acquisition. There is no compelling value proposition for M&M to look at buying Saab. M&M may look at it, if there is some piece of technology or assets which would expand its global presence. But on the face of it, the reasoning is fairly week.”
After running out of cash, Saab Auto filed for bankruptcy and halted production in March 2011. With poor cash-flow, the company faced losses of $263 million in the first half of 2011. Victor Muller, Chief Executive Officer of Saab, said that “two or three” potential buyers were interest in the carmaker and there was a chance of emerging from bankruptcy.
Saab was in talks with Chinese financial backers, including Zhejiang Youngman Lotus Automobile, following a failed attempt earlier in the year to sell a stake to the Jinhua-based carmaker and auto dealer Pang Da Automobile Trade Co. Russian banker Vladimir Antonov, a former Spyker investor, and Hawtai Motor Group, another Chinese company, are other parties whose talks with Saab collapsed earlier.