Saab seeks court protection from creditors

Saab is filing for protection from creditors from a Swedish district court, the automaker's owner, Swedish Automobile, said Wednesday.

Saab is seeking court approval for a voluntary reorganization to secure short-term stability while it waits for funding from Chinese investors Pang Da and Zhejiang Youngman, Swedish Automobile said in a statement.

Victor Muller, CEO of both Saab and Swedish Automobile, said in a statement: "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."

Muller remains optimistic about Saab's future. "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," he said.

Muller added that "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."

Muller has agreed to sell a combined 53.9 percent stake in Saab to Chinese auto distributor Pang Da and automaker Zhejiang Youngman for 245 million euros ($351 million). The deal is awaiting approval from the Chinese authorities.

Saab's subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB are part of the reorganization filing submitted to the Vanersborg court. But other units, including Saab Great Britain, Saab Cars North America and Saab Parts AB, are excluded.

Muller said Pang Da and Youngman both support the reorganization.

If the court approves, the three-month reorganization will be a self-managed, legal process under Swedish law headed by an independent administrator appointed by the court who will work closely with the Saab Automobile management team, the statement added.

General Motors sold Saab to Spyker Cars in 2010. Spyker changed its name to Swedish Automobile earlier this year.

Saab suspended production in late March amid a cash crunch. After brief restarts, the factory in Trollhattan, Sweden, has been halted since early June.

Saab delayed paying wages last week, the third consecutive postponement in as many months, prompting labor leaders to start a process that may lead them to seek a bankruptcy declaration.

By Paul McVeigh- Automotive News Europe