China order means Saab can pay staff

Workers at the Saab factory in Sweden enjoyed a rare spot of good news yesterday after an order for more than 500 cars put the ailing manufacturer in a position to meet its wage bill.

However, production remains on hold against the backdrop of continued discussions over further financing and over a deal with suppliers.

Saab said an unnamed Chinese company had placed a €13 million order ($23 million) for 582 vehicles, with "the full pre-payment" expected this week.

The influx of cash means the firm, which is owned by Swedish Automobile and last week said it would be unable to service its wage bill as it remained locked in financing discussions, will be able to pay staff.

However, Martin Crum, an analyst at the AEK brokerage, said the funds would not be enough to restart production.

"It's nice that they got this advance but, as far as I can calculate, it is enough to pay salaries for this month but not enough to satisfy suppliers, so not enough to get production up and running." he said.

Saab's chief executive, Victor Muller, said that the company was working on securing additional funds.

- Independent