After concluding that a reconstruction (a new creditor protection process) will not work, the Vanersborg district court in western Sweden rejected Saab’s application to be protected from creditors so that it could have some breathing space to acquire funds from Chinese investors and work out its cash problems. Saab released a statement to express its disappointment with the ruling. Saab will file an appeal over this decision.
In 2009-2010, Saab had gone through this process during the period when General Motors was still its owner. The current owner of Saab, Swedish Automobile NV, sought the protection of the court so that creditors' payment demands won’t force the automaker into bankruptcy and will give it time to implement its plan to secure its future.
Saab filed for bankruptcy protection last Wednesday via a voluntary reorganization process that would have meant that the court will appoint an administrator for the reorganization of the company.
Saab had stated that the reorganization plan will be introduced to creditors within three weeks of filing it. For several months, the struggling company had been trying to find funding from different investors.
Since April, production had been on hold as suppliers stopped providing parts when Saab failed to pay them. The salaries of its workers were unpaid in August. Last Wednesday, Saab CEO Victor Muller said that it owes 150 million euros ($210 million) to suppliers.