Saab files for bankruptcy: A sad day for all

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Saab has filed for bankruptcy. A statement from parent company Swedish Automobile NV (Swan) said: “Saab Automobile, Saab Automobile Tools and Saab Powertrain filed for bankruptcy with the District Court in Vänersborg, Sweden this morning.”

“After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded.

“The Board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors. It is expected that the court will approve of the filing and appoint receivers for Saab Automobile very shortly.

“Swan does not expect to realize any value from its shares in Saab Automobile and will write off its interest in Saab Automobile completely.”

Swan’s decision comes on the day when the District Court in Vänersborg was due to decide whether to take Saab out of reorganisation, the process that was protecting it from its creditors while it tried to source crucial funding from China.

One of the key sticking points in Swan’s efforts to thrash out a deal to save Saab involved the car firm’s former owner, General Motors.

GM, which still holds shares in Saab and provides technology used in some Saab models, was reluctant to authorise Youngman’s investment in Saab because it was worried about its intellectual property ending up in Chinese hands if Youngman bought the company.

Saab chiefs were confident they could resolve this by restructuring the business in a way that would ‘insulate’ the current models built with GM technology from those that would be developed with new partner Youngman.

Having said it would block the sale earlier this month, GM reiterated its position over the weekend. A statement from the company said it did not feel the terms of the Youngman buy-out had changed sufficiently to assuage its concerns over its technology.

GM’s position left Swan in a stalled position and, with Saab workers still waiting for November’s wages and this month’s pay cheques due imminently, it had little option but to pull the plug.

If Saab’s application for bankruptcy is approved by the court, it is likely that a new administrator will be appointed in place of Guy Lofalk, who has been in charge during the reorganisation process.

Lofalk ran out of patience with Saab’s chiefs earlier this month and applied to the Swedish court to have Saab taken out of reorganisation.

Saab has been resisting the move while it attempted to source funding from Chinese investor Youngman. Last week Swan confirmed that it had received a much-needed cash injection from Youngman but it needed further funds to bolster its long-term future.

 

SOURCE:

Autocar.

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