Saab Automobile is close to obtaining short-term financing which it could use to continue operating while it awaits funds from Chinese investors, according to an insider who is familiar with the deal.
The source revealed that company executives are "very optimistic" regarding having more funds within the week. Last week, the source stated that the company is in talks with several parties for short-term and medium-term financing to resume operations.
While awaiting a financial lifeline, Victor Muller, who is Saab Chairman, informed the Automotive News that Saab is studying reorganization in order to protect itself from creditors.
Muller stated that they will not rule anything out and that they are focused on a solution, according to Autonews. "If the collection agency moves forward we have to protect ourselves," he added.
Last year, Saab was rescued from bankruptcy by Dutch group Swedish Automobile NV when its former owner General Motors intended to shut it down. It has struggled to increase financing to resume production, settle suppliers' bills and pay wages. Short-term financing is vital to the survival of Saab.
Muller has inked investment deals with Chinese automaker Zhejiang Youngman Lotus Automobile Co. and vehicle distributor Pang Da Automobile Trade Co. However, approval process with Saab's Chinese investors will not be complete until the middle of October. Officials at Saab are working on other alternatives to secure bridge financing.
If the company gets a court creditor protection order, which is somewhat the Swedish equivalent of Chapter 11, it would place the automaker in a process of corporate restructuring. Under that status, the automaker gets protection from creditors while a management and administrator seeks to restructure it.