Saab creditors might be able to liquidate the company… Deja vu?

Article by Christian Andrei, on December 8, 2011

It’s possible that Saab’s creditors will be able to liquidate the company after it was reported that Saab's administrator will ask a court to end its voluntary reorganization. Swedish Automobile NV, which owns Saab, said that the European brand and its creditors have around five to six days to submit their views to the district court in Sweden before the court hands down its ruling on whether the reorganization will be ended.

In the past year, Saab has encountered one crisis after another. It has not built a car in several months since its Trollhattan, Sweden factory had been closed due to unpaid salaries and bills.

Since September, Saab has been under court protection from its creditors in Sweden. Unions, which represented its employees, had started proceedings to place it in bankruptcy due to unpaid wages.

Swedish Automobile found two China-based investors -- Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile. However, multiple problems plagued the agreement, one of which is General Motors’ opposition to the deal.

GM, the former owner of Saab, still licenses technologies to Saab. In a statement last Wednesday, Swedish Automobile said that Saab’s management will study what actions it will take in the future.

Talks with Youngman are ongoing about the funding required for the wages to be paid and for the continuation of the voluntary reorganization. Last Tuesday, GM said that it won’t support a proposed ownership structure for Saab that includes the participation of a Chinese bank.

GM said that it would be hard to be supportive of Saab’s sale since it is unfavorable to GM's competitive position in China as well as other major markets. [source: Autonews]

Topics: saab

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