Swedish court rejects Saab's application for bankruptcy protection

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STOCKHOLM — A Swedish court on Thursday rejected car maker Saab’s application for creditor protection, paving the way for possible bankruptcy filings from labor unions within days.

The owner of cash-strapped Saab filed for bankruptcy protection Wednesday in an attempt to salvage a brand hurt by production stoppages, withheld salary payments and mounting debt.  BJORN LARSSON ROSVALL/ASSOCIATED PRESS
BJORN LARSSON ROSVALL/ASSOCIATED PRESS
The owner of cash-strapped Saab filed for bankruptcy protection Wednesday in an attempt to salvage a brand hurt by production stoppages, withheld salary payments and mounting debt.

The ruling by the Vanersborg District Court is the latest setback for cash-strapped Saab as it scrambles to solve a liquidity crisis that has left it teetering on the brink of collapse.

The company, owned by the Netherlands-based Swedish Automobile, is struggling to pay suppliers and staffers, and production at its manufacturing plant in Trollhattan, Sweden, has been suspended for most of the year.

The two biggest unions representing Saab’s 3,700 employees said they would take action within days on behalf of members still waiting for their August salaries.

Swedish Automobile, formerly known as Spyker Cars, had submitted an application for bankruptcy protection Wednesday, including plans for a reorganization to help revitalize the brand.

But the court said it remains unclear how Saab – which underwent a reorganization under previous owner General Motors Co. in 2009 – will find the money it needs to stay afloat.

Swedish Automobile’s Dutch CEO, Victor Muller, is hoping for a $344 million cash injection from Chinese investors Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. that is currently awaiting regulatory approval.

“It appears unclear if – and if so when – the relevant Chinese authorities will approve the agreements,” the court said, adding that other financial solutions presented don’t seem sustainable.

“In sum, the court finds that it appears unclear how the company will be able to solve the liquidity crisis and continue operations,” the ruling said.

Saab said in a statement it was “disappointed” and would appeal the decision and update the market “on further developments” today. It gave no details.


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