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GM's Saab files for bankruptcy protection
By Karl Ritter |
February 21, 2009, Saturday
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Print Edition
Print Edition
SWEDISH car maker Saab filed for bankruptcy protection yesterday so it can be spun off or sold by its struggling American parent, General Motors Corp, officials said.
An application to reorganize Saab was filed at a district court in Vanersborg, Sweden, company spokeswoman Margareta Hogstrom said.
The move comes after the Swedish government rejected a request from loss-making GM to inject money into Saab.
GM, which is seeking help from the United States government to avoid bankruptcy at home, has been looking for buyers for Saab but said that it needs more funding to spin off or sell the division.
"We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment," said Saab's managing director, Jan Ake Jonsson.
The move would give Saab protection from creditors while it restructures in a process similar to a Chapter 11 bankruptcy in the US.
"Pending court approval, the reorganization will be executed over a three-month period and will require independent funding to succeed," Saab said, adding that it would seek funding from both public and private sources.
On Wednesday, Industry Minister Maud Olofsson rejected GM's plea for state funding for Saab, saying that it was up to the American car maker to save the brand.
In its own restructuring plan, GM said on Tuesday that it needed about US$6 billion in support from the governments of Canada, Germany, Britain, Sweden and Thailand to help its overseas operations.
An application to reorganize Saab was filed at a district court in Vanersborg, Sweden, company spokeswoman Margareta Hogstrom said.
The move comes after the Swedish government rejected a request from loss-making GM to inject money into Saab.
GM, which is seeking help from the United States government to avoid bankruptcy at home, has been looking for buyers for Saab but said that it needs more funding to spin off or sell the division.
"We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment," said Saab's managing director, Jan Ake Jonsson.
The move would give Saab protection from creditors while it restructures in a process similar to a Chapter 11 bankruptcy in the US.
"Pending court approval, the reorganization will be executed over a three-month period and will require independent funding to succeed," Saab said, adding that it would seek funding from both public and private sources.
On Wednesday, Industry Minister Maud Olofsson rejected GM's plea for state funding for Saab, saying that it was up to the American car maker to save the brand.
In its own restructuring plan, GM said on Tuesday that it needed about US$6 billion in support from the governments of Canada, Germany, Britain, Sweden and Thailand to help its overseas operations.
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