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Saab drives into bankruptcy
September 8, 2011, Thursday
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THE owner of cash-strapped carmaker Saab filed for bankruptcy protection yesterday in a last-ditch attempt to salvage a brand crippled by production stoppages, withheld salary payments and mounting debt.
Swedish Automobile, formerly known as Spyker Cars, said the move would buy it time to get funding from Chinese investors, now awaiting regulatory approval, and avoid bankruptcy.
Saab and its subsidiaries Powertrain and Tools are included in the plan for a voluntary and "self-managed" reorganization, while overseas units have been excluded, Swedish Automobile said.
If approved by the court and Saab's creditors, an initial three-month court-administered reorganization phase would halt any debt collection processes as well as potential bankruptcy filings.
Some of Saab's creditors have threatened to put it into bankruptcy amid its problems in paying suppliers and staff.
The Vanersborg District Court in southwestern Sweden received the application and expected to make a decision by today, court spokeswoman Elisabeth Lindstrom said.
Netherlands-based Spykers Cars changed its name to Swedish Automobile after deciding to focus only on the Saab brand. Led by Dutch businessman Victor Muller, the firm has failed to revive the loss-making brand since taking it over in 2010 from General Motors Co, which was in the process of dismantling it.
Failure to pay suppliers for parts forced it to suspend production at its plant in Trollhattan, Sweden.
Salary payments for many of Saab's 3,700 workers have been postponed in recent months as the liquidity crisis worsened. These salaries will be sought for under Sweden's state's wage guarantee scheme.
The application for creditor protection calls for cutting costs and "creating a viable, competitive and independent organization," Swedish Automobile said.
"The eventual purpose of the proposed voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding," it said.
Saab has struck deals for cash injections from Chinese investors Zhejiang Youngman Lotus Automobile Co and Pang Da Automobile Trade Co.
Swedish Automobile, formerly known as Spyker Cars, said the move would buy it time to get funding from Chinese investors, now awaiting regulatory approval, and avoid bankruptcy.
Saab and its subsidiaries Powertrain and Tools are included in the plan for a voluntary and "self-managed" reorganization, while overseas units have been excluded, Swedish Automobile said.
If approved by the court and Saab's creditors, an initial three-month court-administered reorganization phase would halt any debt collection processes as well as potential bankruptcy filings.
Some of Saab's creditors have threatened to put it into bankruptcy amid its problems in paying suppliers and staff.
The Vanersborg District Court in southwestern Sweden received the application and expected to make a decision by today, court spokeswoman Elisabeth Lindstrom said.
Netherlands-based Spykers Cars changed its name to Swedish Automobile after deciding to focus only on the Saab brand. Led by Dutch businessman Victor Muller, the firm has failed to revive the loss-making brand since taking it over in 2010 from General Motors Co, which was in the process of dismantling it.
Failure to pay suppliers for parts forced it to suspend production at its plant in Trollhattan, Sweden.
Salary payments for many of Saab's 3,700 workers have been postponed in recent months as the liquidity crisis worsened. These salaries will be sought for under Sweden's state's wage guarantee scheme.
The application for creditor protection calls for cutting costs and "creating a viable, competitive and independent organization," Swedish Automobile said.
"The eventual purpose of the proposed voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding," it said.
Saab has struck deals for cash injections from Chinese investors Zhejiang Youngman Lotus Automobile Co and Pang Da Automobile Trade Co.
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