Saab may still be able to avoid bankruptcy

Article by Christian Andrei, on September 20, 2011

Saab may still be able to avoid bankruptcy as last Monday, a court in Sweden gave the automaker leave to appeal the decision of a lower court that denied the company protection from creditors. Earlier this month, Saab applied for protection from creditors, but it was denied. Saab owes around 150 million euros or $207 million to suppliers as well as the August wages to its workers.

The automaker asked for leave to have the case re-examined, pointing to a promise of new financing that it received last week, among other things. The Swedish court did not provide the details on its decision to grant leave to appeal.

Gunilla Gustavs, a Saab spokesperson, said that they are "naturally pleased" and the decision was an "important step in the right direction, according to Autonews.

We are hopeful." The court must now make a decision on whether to grant Saab protection from creditors and overturn the earlier ruling. Gustavs hopes that the ruling will be made this week. Since April, production at Saab has been more or less at a standstill when suppliers halted their deliveries to the automaker due to unpaid bills.

Saab is hoping that the protection from creditors will allow it to survive until the authorities in China approve a 245 million-euro investment by car companies Pangda and Zhejiang Youngman Lotus Automobile.

Last week, the company entered into a 70-million-euro bridge financing with the help of a guarantee from Youngman.

A supplier and two of Saab's own unions later asked a court to declare it bankrupt after the company's application for protection from creditors was denied. Gustavs disclosed that they will continue to get further funding as well as prepare the company for reconstruction.

Topics: saab, bankruptcy

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