SaaBust?
Posted: Wed Sep 07, 2011 9:04 pm
Shame, Saab make class cars.http://www.ft.com/cms/s/0/53a4796e-d923 ... z1XIpv45Xi
Saab, the loss-making Swedish carmaker, has filed for bankruptcy protection for the second time in less than three years after failing to raise the financing needed to resume production.
The carmaker and its engine and tools divisions filed for voluntary reorganisation in Vänersborg, Sweden, after concluding this would “entail the best preconditions for using existing resources in the most efficient way”. The filing does not cover Saab’s North American or UK sales entities.
Saab’s owners had been trying to raise short-term financing to keep the brand afloat until it secures Chinese government approval for a €245m deal agreed in June with two companies, Pang Da Automobile Trade Co and Zhejiang Youngman Lotus Automobile, to distribute and build its cars in China.
Its unions and suppliers had been threatening to petition for Saab’s insolvency themselves because of unpaid wages and bills. Many of its suppliers have cut off deliveries due to non-payment, and Saab has made no cars since early June
Saab last entered administration in February 2009 after General Motors, its then-owner, was itself preparing to file for bankruptcy protection in the US.
Swedish Automobile, Saab’s owner, said that the protection from creditors filing would allow the carmaker to seek help from the Swedish state’s wage guarantee scheme to pay workers’ overdue salaries and undertake “an orderly restart of production”.
The court is due to decide on Thursday whether to accept the company’s application. The company acknowledged that insolvency could not be ruled out if the court refused to grant protection.
“We had no other alternative than to seek protection against our creditors,” Victor Muller, Swedish Automobile and Saab’s chief executive, told the Financial Times. “If we hadn’t done that, unions would have had to apply for bankruptcy in order to ensure the company could pay wages.”
Mr Muller said that the carmaker was now looking for debtor-in-possession financing of €50m to €100m from banks, private individuals, and private equity funds, an amount he said that would be enough to restart production. He said that Saab had unpaid bills of €150m.