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Saab files for bankruptcy

Saab has filed for bankruptcy after failing to secure further funding in its financial crisis.

The carmaker had endured a cashflow crisis since April, which led it to shut down its production lines as it lacked funds for components.

Bankruptcy protection had been secured from a Swedish court until December 21 while the company battled to secure financial support from Chinese investors, but that protection will end once the court makes its ruling today.

A press conference is expected to take place after the court ruling.

In a statement, Swedish Automobile said it decided to file for bankruptcy after previous owner General Motors (GM) rejected all proposals presented to salvage the troubled brand on Saturday.

It said GM's position meant China's Zhejiang Youngman Lotus Automobile had pulled out of talks to continue to finance the company's reorganisation.

Saab's administrator had applied to end the protection on December 7, saying the company was out of money and had no realistic hope of gaining financing soon.

Saab's UK operation, Saab GB, was put into administration on November 29.

A Saab dealer, who preferred to remain anonymous, told AM that of the 58-strong network, just 20 are believed to be sticking with Saab while the rest have “left or are searching for the exit”.

Saab GB is believed to have 800 approved used cars and 200 new cars in stock left to circulate throughout the network. Dealers have been told bonuses will be honoured.

Saab's official statement said: "After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded.

"The board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors. It is expected that the court will approve of the filing and appoint receivers for Saab Automobile very shortly. 

"Swan does not expect to realize any value from its shares in Saab Automobile and will write off its interest in Saab Automobile completely."


 

 

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