Saab restructuring process in danger

The restructuring of Saab could be called off after the company's administrator Guy Lofalk on Thursday applied for the process to be halted, according to a statement from Swedish Automobile (SWAN), Saab's parent company.

Saab restructuring process in danger

Guy Lofalk, who has been appointed by the Vänersborg district court in southwestern Sweden to oversee Saab’s three-month restructuring process under

bankruptcy protection, had informed the company he would ask that the process be terminated, SWAN said in a statement.

Although the statement did not provide an explanation, Lofalk’s decision indicates he does not think the restructuring will be successful.

The District Court will decide whether to approve Lofalk’s application. If the application is granted, the bankruptcy petitions from Saab’s creditors will be reactivated.

“Saab Automobile shall contest this application and request for continuation of the voluntary reorganisation process,” SWAN said, adding that it also planned to “apply at the court for replacement of Mr. Lofalk as administrator.”

Saab’s Chinese backers have so far only pumped in a portion of the money needed to secure Saab’s immediate future. According to the plan, Saab should have received 640 million kronor ($97 million) by Saturday.

SWAN has previously said it doubts Chinese companies Youngman and Pang Da will pay the required money by Saturday.

Saab must urgently secure funding in order to continue the reconstruction.

The company has therefore turned to American venture capital firm North Street Capital for help.

The deal would give North Street 2.4 million shares worth $4.19 a piece and the money would be with Saab on Friday. It would also include a $60 million loan which is still being negotiated.

“Immediate availability of funding is necessary to continue the reorganisation process of Saab Automobile,” the company said.

According to SWAN, the goal is to have completed the documentation by Monday at the latest.

If the planned transactions go through, Saab will receive 66 million kronor from their share issue, and a total of 396 million by next Wednesday.

Saab’s wage bill is currently being covered by the Swedish state salary guarantee scheme but this is due to expire on Friday after which Saab will be liable for paying employee wages.

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Former Swedish Saab bosses appear in court

Swedish car maker Saab's former CEO Jan Åke Jonsson and the firm's former head lawyer Kristina Geers have appeared in court in Vänersborg in west Sweden, accused of falsifying financial documents shortly before the company went bankrupt in 2011.

Former Swedish Saab bosses appear in court
Saab's former CEO Jan Åke Jonsson. Photo: Karin Olander/TT
The pair are accused of falsifying the paperwork at the height of the Swedish company's financial difficulties at the start of the decade.
A third person – who has not been named in the Swedish media – is accused of assisting them by issuing false invoices adding up to a total of 30 million kronor ($3.55m).
According to court documents, the charges relate to the firm's business in Ukraine and the paperwork in question was signed just before former CEO Jan Åke Jonsson resigned.
Both Jonsson and Saab's former head lawyer Kristina Geers have admitted signing the papers but denied knowledge of the Ukranian firm implicated in the case.
All three suspects deny all the charges against them.

Saab's former head lawyer Kristina Geers. Photo:  Björn Larsson Rosvall/TT
Saab filed for bankruptcy at the end of 2011, after teetering on the edge of collapse for nearly two years.
Chief prosecutor Olof Sahlgren told the court in Vänersborg on Wednesday that the alleged crimes took place in March 2011, when Saab was briefly owned by the Dutch company Spyker Cars.
It was eventually bought by National Electric Vehicle Sweden (Nevs), a Chinese-owned company after hundreds of staff lost their jobs.
The car maker, which is based in west Sweden, has struggled to resolve serious financial difficulties by attracting new investors since the takeover.
In October 2014 it announced it had axed 155 workers, close to a third of its workforce.
Since 2000, Saab automobile has had no connection with the defence and aeronautics firm with the same name. It only produces one model today, the electric 9-3 Aero Sedan, mainly targeting the Chinese market.