Saab Files for Bankruptcy Protection
Dutch businessman Victor Muller, the owner of Saab, has filed for bankruptcy protection. The move appears to be a last ditch effort to save the Swedish Automobile company which has been paralyzed by production standstills, mounting debt, and salary issues. Currently, Swedish Automobile has unpaid bills totaling $210 million; said Muller.
The Saab factory in Trollhattan, southwestern Sweden, has come to halt, due to the company’s inability to pay suppliers. Saab has been unable to pay its 3,700 workers on time for the past few months, which has Labor unions threatening to push the company into bankruptcy.
If the court and their creditors approve Saab’s bankruptcy protection, a three-month court-administered reorganization phase would be initiated, thus putting a stop to any debt collection activity and the threat of bankruptcy. Saab as well as its subsidiaries Saab Automobile Powertrain AB and Saab Tools AB have been included in the plan for the voluntary and “self-managed” reorganization, although overseas units have been excluded.
Saab formerly known as Spyker Cars, is hoping that if granted, the bankruptcy protection would buy them enough time to accumulate funding, and allow them to avoid bankruptcy. Muller has been in the process of reviving the struggling brand for the past year after taking it over from General Motors.
Although Muller stated that bankruptcy protection would lead to “a number of tough issues and decisions,” he plans to remain the CEO until Saab is brought out of the reorganization process. “Quitting for me is not an option,” Muller stated at a news conference.
Muller hopes to secure financing from Chinese investors Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. With this financing, comes agreements to manufacture and distribute Saab cars in China, but so far, this has been delayed due to pending approvals from Chinese authorities.
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