• Sweden's news in English

Crisis-hit Saab files for bankruptcy protection

TT/AFP/The Local · 7 Sep 2011, 12:22

Published: 07 Sep 2011 08:49 GMT+02:00
Updated: 07 Sep 2011 12:22 GMT+02:00

Facebook Twitter Google+ reddit

The move comes after a period of intense speculation and reports that Saab's cash has run dry with workers left without salaries for August and debts to suppliers left unpaid.

The application for what is officially referred to as a business reconstruction provides Saab protection form its creditors and also means that employee salaries will be paid out by the state salary guarantee.

According to the press release, an application was submitted to Vänersborg District Court on Wednesday morning.

Saab's subsidiaries Saab Automobile Powertrain and Saab Automobile Tools are also covered by the reconstruction.

The purpose is to secure "short term stability" and at the same time open up for further financing in anticipation of expected funds from Chinese firms Pang Da and Youngman, the company explains.

Saab's CEO and chairman Victor Muller has searched worldwide over the past six months trying to secure financing to enable the firm to restart its Trollhättan factories, which have lain dormant since the spring.

The last time Saab entered reconstruction was in 2009 prior to takeover discussions with Swedish sports car maker Koenigsegg.

Saab have summoned factory staff to work on Wednesday, according to a report on the TV4 Nyheterna news programme.

"They will be given information, an update on the situation," said Gunilla Gustavs at Saab's information department to the TT news agency.

The main union at Saab, IF Metall, said Wednesday it thought filing for reorganisation "could be a positive solution for Saab," adding that it hoped

the court would process the request soon so its "members can quickly receive

word about their salary payments."

Swedish Automobile's share price on Wednesday remained unchanged shortly

after opening on the Amsterdam Stock Exchange at 0.72 euros per share.

Rumours of a looming bankruptcy have long been circulating, as production has remained halted for months and the company has scrambled to dig up cash to pay off piles of unpaid bills to suppliers.

On Wednesday, Saab said it would "seek the support of its creditors for the reorganisation process and is confident it will obtain this support, particularly because Saab Automobile aims at full redemption of outstanding debts."

It said the aim of the reorganisation was "to secure short-term stability while simultaneously attracting additional funding" as it waits for a pending cash injection from its already agreed partnerships with Chinese firms Pang Da and Youngman, to get production moving.

"While the voluntary reorganisation 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," Muller said in the statement.

Saab's problems have become increasingly apparent in recent months as Muller has scrambled to pull together funds to pay bills and restart production, and became glaringly obvious late last month when Saab for the third month in a row said it would not be able to pay all of its 3,700 employees their salaries on time.

August salaries have yet to be paid, and Saab said that as part of its reorganisation application it had requested "the Swedish state's wage guarantee scheme to allow wage payments to all Saab Automobile employees to be made."

Wednesday's announcement came just two and a half years after the carmaker last went through a large-scale restructuring to avoid bankruptcy, when more than 75 percent of its debts were written down.

Story continues below…

But observers were quick to point out that the situation today is radically different than last time.

While the brand in February 2009 had a number of new models brewing, never halted production and enjoyed some protection from its owner GM, it is now in the precarious situation of having basically halted production since April with a current owner unable to even provide enough cash to pay salaries.

Bankruptcy expert and lawyer Rolf Aabjoernsson, who represented Saab creditors during the last reorganisation, said on Wednesday he expected the court to reject Saab's request.

"How could Saab succeed when they have no money, no production, nothing?" he asked in comments to the TT news agency.

"They have nothing besides dreams and they don't stand up in court," he added.

It is not yet known when the court will announce its decision.

TT/AFP/The Local (news@thelocal.se)

Facebook Twitter Google+ reddit

Your comments about this article

21:04 September 7, 2011 by spy
And I can confirm that Rolf Aabjoernsson is now off Victor Muller's Christmas card list.
11:14 September 8, 2011 by jack sprat
He obviously realizes that pigs can't fly.
18:36 September 9, 2011 by dcarlson12
Funny how such a well built safe car can just die. But I guess that is business.
22:24 September 9, 2011 by tomas R

SAAB will survive. I am sure in it. Maybe the cost of this survive could be very cruel to some workers of SAAB. People could lose the job.

But I like this car. I am driving SAAB 9000'95 for five years and the engine still runs without problems.

Best regards to SAAB!

tomas (Lithuania)
Today's headlines
Facebook slammed for cutting Swedish breast cancer video
File photo of the landing page of the Swedish version of Facebook. Photo: Christine Olsson/TT

The social media giant removed a breast cancer awareness video because it deemed the images "offensive," according to the Swedish Cancer Society.

Pastor rapped for depicting rival as Nazi in church play
A different pastor. Photo: Christine Olsson/TT

The pastor allegedly found it funny.

In Pictures: Look inside this perfect Swedish island home
This modern Gotland home was designed and built by two Swedes. Photo: United Frog Studios/AB

Anna-Lena and Johan designed and built their home with tall beautiful windows, a smart heating system, and a separate section for their greyhounds.

Cannabis worth millions seized at Swedish port
A file photo of a Swedish police cannabis find not related to the story. Photo: Polisen

The 300kg haul was found by in a truck which drove off a ferry in Karlskrona.

Roll over Volvo: there’s a new Swedish car in town
Photo: Björn Olsson

Car developers in Gothenburg have given Volvo a new sibling.

Thaw trip: Swedish PM Löfven heads to Saudi Arabia
Margot Wallström was at the centre of the 2015 diplomatic crisis. She will not join the Prime Minister on his trip to Saudi Arabia. Photo: Adam Ihse/TT

There are fences that need mending.

Here's where it could snow in central Sweden this weekend
This shot of snow in western Sweden may not be as far away as you think. Photo: Johan Eklund/TT

...and it's still only October.

Fury at plans that 'threaten the IB's survival' in Sweden
The new rules are unfair, say Swedish IB pupils. Photo: Berit Roald/NTB scanpix/TT

A new system for converting the grades of International Baccalaureate students in Sweden will make it almost impossible for them to get into top Swedish universities, it has been claimed.

Education doesn’t always pay in Sweden: study
Nurses are paid less than a lot of non-college graduates. Photo: Bertil Ericsson/TT

Half of Swedish graduates would earn more in their lifetime if they instead started work straight after high school, a new study shows.

What's On in Sweden
Five ways to discover something new in Sweden this weekend
Frank Zappa's symphonic works will be performed in Malmö this weekend. Photo: Anonymous/AP

From a performance of Frank Zappa's unheralded orchestral work to an intriguing combination of circus and opera, Sweden has some unique events this weekend.

Sponsored Article
This is Malmö: Football capital of Sweden
Analysis & Opinion
Are we just going to let half the country die?
Sponsored Article
Where is the Swedish music industry heading?
Angry elk chases Swede up a lamp post
The Local Voices
'Alienation in Sweden feels better: I find myself a stranger among scores of aliens'
Blog updates

8 July

Editor’s blog, July 8th (The Local Sweden) »

"Hej readers, It has, as always, been a bizarre, serious and hilarious week in Sweden. You…" READ »


6 October

10 useful hjälpverb (The Swedish Teacher) »

"Hej! I think the so-called “hjalpverb” (auxiliary verbs in English) are a good way to get…" READ »

Sponsored Article
7 reasons you should join Sweden's 'a-kassa'
People-watching: October 20th
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
The Local Voices
A layover at Qatar airport brought this Swedish-Kenyan couple together - now they're heading for marriage
Swede punches clown that scared his grandmother
Fans throw flares and enter pitch in Swedish football riot
Sponsored Article
Stockholm: creating solutions to global challenges
Could Swedish blood test solve 'Making a Murderer'?
Sponsored Article
Swedish for programmers: 'It changed my life'
Property of the week: Linnéstaden, Gothenburg
Swedish school to build gender neutral changing room
Sponsored Article
Top 7 tips to help you learn Swedish
People-watching: October 14th-16th
Sponsored Article
How to vote absentee from abroad in the US elections
Man in Sweden assaulted by clowns with broken bottle
Nobel Prize 2016: Literature
Sponsored Article
'There was no future for me in Turkey'
Watch the man who discovered Bob Dylan react to his Nobel Prize win
Sponsored Article
‘Extremism can't be defeated on the battlefield alone’
Record numbers emigrating from Sweden
Sponsored Article
Stockholm: creating solutions to global challenges
People-watching: October 12th
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
The Local Voices
'Swedish startups should embrace newcomers' talents - there's nothing to fear'
Sponsored Article
'There was no future for me in Turkey'
How far right are the Sweden Democrats?
Sponsored Article
Where is the Swedish music industry heading?
Property of the week: Triangeln, Malmö
Sponsored Article
Last chance to vote absentee in the US elections
Sweden unveils Europe's first elk hut
People-watching: October 7th-9th
The Local Voices
Syria's White Helmets: The Nobel Peace Prize would have meant a lot, but pulling a child from rubble is the greatest reward
Missing rune stone turns up in Sweden
Nobel Prize 2016: Chemistry
People-watching: October 5th
Must-watch: Incredible time-lapse video of Northern Lights in Sweden
The Local Voices
Why this Russian developer is committed to helping refugees - with tech
jobs available