Swedish court rejects Saab's application for protection from creditors

Kowalski · Sep 8, 2011

More bad news for Saab...

Saab’s application for protection from its creditors to give it time to raise vital funding has been rejected by a Swedish court today.

The company had made the application for a self-managed company reorganisation, which would give it more time to wait for investment from China.

Approximately €245 million (£216m) of funds from car distributor Pang Da and car maker Zhejiang Youngman has to be signed off by the Chinese government before it can be made available to Saab owners Swedish Automobile.

If the application had been successful, Saab would have had at least three months’ protection from creditors while it waited for the cash and made internal efficiency savings. But Vanersborg district court rejected Saab’s application because it did not believe it would work.

Now Swedish trade unions could demand that Saab – which has struggled to pay its workers in recent months and owes its suppliers about £131m – be declared bankrupt.

The development does not affect Saab Great Britain. A statement issued by Saab GB yesterday said, “Saab GB is an independent business and a separate UK legal entity to Saab Automobile. It will continue to operate the business in the UK as normal and its dealer network will continue to provide servicing, replacement parts and vehicle warranty facilities for Saab customers."
Saab can appeal the court’s decision.

They applied for bankruptcy protection, but a Swedish court rejected it. With the exception of the 9-4x, which is assembled in Mexico, not a single Saab has rolled of the Trollhattan plant.

Source: Update: Saab's court request denied - Autocar.co.uk

To say that this a bloody disaster is almost an understatement.

Cashmere · Sep 9, 2011

Wasn't the Koeniggsegg family interested in acquiring Saab?

bmer · Sep 9, 2011

I've found that the most informed site to follow the latest news/rumors about Saab's desperate struggle is Saabs United.

mini_cooper4 · Sep 9, 2011

Saab should then be sold to the one ready to pay the debts. Something like Opel few years back. 500M. investment and you have Opel "for free"

Centurion · Sep 9, 2011

SAABs are the Blackberries of cars. Same models, cars and design for decades. No progression whatnso ever. They must go under.

Kowalski · Sep 9, 2011

Centurion said: ↑

SAABs are the Blackberries of cars. Same models, cars and design for decades. No progression whatnso ever. They must go under.

Who in their right mind is going to spend 30, 40, 50k in an car from an indebted brand that can't even pay its employees? I'm sorry, but I can't see Saab surviving until next year. Actually, I can't see them surviving until Christmas.

Centurion · Sep 9, 2011

Kowalski said: ↑

Who in their right mind is going to spend 30, 40, 50k in an car from an indebted brand that can't even pay its employees? I'm sorry, but I can't see Saab surviving until next year. Actually, I can't see them surviving until Christmas.

They have exhausted their umbillical supply from the Swedish government. The only reason they have been given bail in order to avoid a mass unemployment peak in the case of their closure. Car factories employ thousands of people and are vital to some cities or towns economies.

Merc1 · Sep 9, 2011

R.I.P. The fat lady is warming up her voice right now......performance pending.

M

Bartek S. · Sep 9, 2011

Saab Automobile will appeal on Monday

Press release

SAAB AUTOMOBILE UPDATE ON VOLUNTARY REORGANIZATION

Zeewolde, The Netherlands, 9 September 2011 - Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) aim to submit their appeal on the District Court's decision to reject Saab Automobile's proposal for voluntary reorganization on Monday September 12, 2011.

In yesterday's decision, the District Court argued that the application of Saab Automobile lacks evidence that the purpose of a formal reorganization can be fulfilled. The Court is of the opinion that the first reorganization of Saab Automobile cannot be considered to be a successful one. It is further unclear to the Court whether - and if so when - the Chinese authorities will approve the EUR 245 million equity contribution of Pang Da and Youngman and whether the planned funding will be sufficient to structurally solve Saab Automobile's financial problems. The Court finds that it is unclear how Saab Automobile will be able to end the liquidity crisis and continue its business. The current stops in production are likely to have resulted in considerable loss of the goodwill of the company and an impairment of the Saab trademark.

Saab Automobile disagrees with this interpretation of the voluntary reorganization proposal and aims to submit its appeal on Monday September 12, 2011. After the court has received the appeal it is expected that a decision on the appeal is taken soon after.

In the meantime, Swan and Saab Automobile continue discussions with several parties about obtaining additional funding for the short term.

Swan will update the market on further developments.

Kowalski · Sep 9, 2011

Saab will appeal on Monday and the trade unions will demand Saab's bankruptcy on Tuesday. Mind you, Victor Muller might face the risk of going to jail.

klier · Sep 9, 2011

Victor Muller is a joke.

Giannis · Sep 11, 2011

Kowalski said: ↑

Saab will appeal on Monday and the trade unions will demand Saab's bankruptcy on Tuesday. Mind you, Victor Muller might face the risk of going to jail.

klier said: ↑

Victor Muller is a joke.

I am not following the SAAB case closely, so could you guys please explain me what's up with Mr. Muller?

:t-cheers:

Kowalski · Sep 11, 2011

Giannis said: ↑

I am not following the SAAB case closely, so could you guys please explain me what's up with Mr. Muller?

:t-cheers:

As if Victor Muller doesn’t have enough problems. He has managed to upset Sweden’s state collection agency Kronofogden so much that they are threatening arrest. Muller claimed there is enough money to pay the employees, but if he does that, the state collection agency will get its hands on the money. The collection agency says that Muller has to hand over the cash or go to jail. This quote by Victor Muller sent Hans Ryberg, head of the enforcement agency in Uddevalla to the ceiling:

“There is sufficient cash to pay the salaries, but unfortunately we cannot use that cash by law at this time, because we would favor one group of creditors, and not one other, the suppliers. We would pay the employees and not the suppliers. And that is something we cannot do.”

Ryberg is livid, says Sverigesradio. He had been told there is no money, and suddenly, there is. Ryberg now says that Muller is in violation of his disclosure requirements. He also says that now it is not Muller to decide who shall have the money and who don’t: “Once Kronofogden is involved, then it’s us who must have the money.”

Today, Kronofogden will come knocking at Saab and will ask how much money is where, and why it has not been handed over to Kronofogden. “If Victor Muller does not abide by the rules, he risks arrest,” says Sverigesradio.

Sweden’s state sheriff agrees: “Sure, this applies to all debtors that are in the same situation and that do not disclose all assets in the company.”

Sweden To Muller: Hand Over The Money Or Go To Jail | The Truth About Cars

Kowalski · Sep 12, 2011

Welly, welly, welly, welly, welly, welly, well. Looks like Saab just got a lifeline from the Chinese. A €70 million lifeline.

Saab Gets $96 Million Lifeline In China Deal As It Renews Bid For Court Protection

Unions seek bankruptcy ruling in pursuit of unpaid wages

Saab Automobile said today it has arranged 70 million euros ($95.6 million) in bridge financing with the help of a Chinese guarantee, buying some time while it renewed legal efforts to seek court protection from creditors.

In three significant developments today, parent company Swedish Automobile NV said:

Saab has signed a technology license agreement with a legal entity, called a specialty purpose vehicle (SPV), for 70 million euros, according to a statement. As part of the deal, Chinese car producer Zhejiang Youngman Lotus Automobile has also signed a technology license deal with the SPV, providing a guarantee for its payment.

Saab filed a formal appeal to a Swedish court decision last week to deny Saab's attempt to protect itself from creditors.

Confirmed that two Saab white collar unions in Sweden filed a court petition to have the automaker placed in bankruptcy.

Licensing deal

In its latest of several attempts to raise immediate cash, Swedish Automobile said the SPV licensing deal was part of a bridge loan, and that it intended to repay that with proceeds of the 245 million euro equity investment promised by Chinese partners Pang Da Automobile Trade Co. and Youngman.

The deals are still awaiting approval from the Chinese authorities, and in the past they have halted planned investments such as Saab's failed deal with Hawtai Motor Group in May and Sichuan Tengzhong Heavy Industrial machinery's bid for General Motors Co.'s Hummer, which collapsed in 2010.

Saab has been on the brink of collapse after a Swedish court last week rejected its initial application for protection from creditors.

Saab said it filed the appeal the court's decision today, saying the court's interpretation of the Swedish law was too strict.

"Saab Automobile is of the opinion that in its ruling, the District Court has applied a much stricter standard of proof than is required under the Act," the company said in a statement.

Saab went through the process in 2009-2010 when it was owned by GM. Swedish Automobile said it wanted the court's protection to stop creditors' payment demands from pushing the carmaker into bankruptcy and allow it to work on securing its future.

Lack of funds has forced Saab to halt production for months, while suppliers and workers have not been paid.

Unions pursue bankruptcy

Meanwhile, two white collar unions today applied to a court to have Saab made bankrupt after losing patience over delayed salaries.

The unions are the largest white collar organization, Unionen, and the smaller union for managers called Ledarna. The unions want to activate a state scheme to pay wages. None of Saab's employees have been paid for August.

"A bankruptcy application is a way to make sure that our members are not left without the money they have a right to," Unionen chairman Cecilia Fahlberg said in a statement.

Unionen represents about half of the 3,600 workforce at Saab, which is owned by Swedish Automobile NV. Ledarna has 126 members at the automaker.

In a separate statement, Swedish Automobile said the court has received the filing, but has not yet rendered a judgment which could take several weeks.

Automotive News:Saab gets $96 million lifeline in China deal as it renews bid for court protection

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Swedish court rejects Saab's application for protection from creditors

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