Saab Denied Bankruptcy Protection By Swedish Court
September 8, 2011
After months of failed funding negations and ceased production, Saab, along with its Saab Powertrain and Saab Tools subsidiaries, announced this week that it had filed for voluntary bankruptcy protection with the District Court in Vanersborg, Sweden.
However, the court today rejected Saab’s application for protection from its creditors (mainly suppliers and labor unions), leaving the door open for bankruptcy.
The decision comes because of doubt surrounding Saab’s ability to generate enough funding to pay off its debts.
Saab was hoping a reorganization procedure would be granted, whereby a court-appointed administrator would work closely with Saab’s management team over a period of up to one year to help the automaker pay off its debts.
Additionally, the court-appointed administrator would apply for a government-backed wage guarantee scheme to allow wage payments to all Saab employees to be made, starting with August salaries. As for Saab’s creditors, they would have to wait a little while longer pending the outcome of the reorganization.
Saab’s parent company Swedish Automobile, run by Victor Muller, is confident that it will be able to secure additional short-term funding and remains in negotiations with several parties about obtaining such funding, namely, China’s Pang Da and Youngman.
According to Swedish Automobile, funding for Saab to pay off its debts has been secured through binding agreements with Pang Da and Youngman as announced back in July, though none of these agreements have been given official approval by Chinese and Swedish government agencies. Right now Saab’s only hope is gaining approval of these alliance deals, though it certainly looks as though the sun is setting on the automaker.