Saab enters Court Protection – just as we predicted

Victor Muller takes Saab in to Court Protection

Two weeks ago we reported that Saab were about to seek court protection from its creditors in a bid to buy time until investment from China arrives. And that’s exactly what’s happening.

Saab are waiting for investment funding from China – via Pang Da and Youngman – totalling €245 million which should put Saab back on a solvent footing – at least for a while – and allow the beleaguered Swedish car maker to resume production and push on with future plans.

By seeking the legal protection of the Swedish courts, Saab can take three weeks to come up with a re-organisation plan and, if that’s approved by the court, take a further three months to get everything in place, with a moratorium on claims against the company. In exceptional circumstances that moratorium could be extended to a year.

By our reckoning, the Chinese authorities should approve the investment by Pang Da and Youngman by late October, giving Saab the lifeline it needs in a timeframe that works perfectly with the Swedish Court Protection system.

Victor Muller, Saab boss and business Houdini, said:

Since securing the long-term funding through conditional agreements with Pang Da and Youngman, who both support this voluntary reorganization, we have focused on securing funding to bridge the period until we receive their funds. We have concluded that a voluntary reorganization process will provide us with the necessary time, protection and stabilization of the business, allowing salary payments to be made, short-term funding to be obtained and an orderly restart of production to be prepared.

While the voluntary reorganization process will no doubt present us with a number of tough issues and decisions, I believe that Saab Automobile will emerge stronger from this process. The potential for Saab Automobile as a viable, independent premium car manufacturer is there, as shown by the rejuvenation of our product portfolio, approximately 11,000 orders and the conditional long-term funding already in place through the binding agreements with Pang Da and Youngman that will give us access to the Chinese market.

I would also like to express my deep gratitude to our employees, dealers, suppliers and all other stakeholders who have been so patient and understanding in the past trying months. I realize that we have severely tested their patience, but it has been heartening to see that in general, our employees, dealers, suppliers and other stakeholders have stood by us through this tough period. I look forward to continuing these relationships and collectively start building a brighter future for Saab Automobile.

There are now only two clear scenarios left; Saab gets the funding from Pang Da and Youngman in the next three months and a new chapter starts at Saab. Or it doesn’t, and goes bust.

Surprisingly, we’d bet on the former.

By Cars UK