Struggling Saab wins reprieve
STOCKHOLM/AMSTERDAM (Reuters) - Struggling car maker Saab SWAN.AS gained fresh breathing room in its fight for survival on Wednesday when it won a court appeal to be granted protection from creditors while it awaits Chinese investment.
The 60-year-old company has been fighting to stay afloat for most of this year after it ran out of cash. It was rescued from closure last year by Dutch group Spyker, now called Swedish Automobile SWAN.AS, which bought it from former owner General Motors.
"It shows the court thinks the company is viable and that it has a chance of survival," Swedish Automobile chief executive Victor Muller told Reuters after a court of appeal in west Sweden granted its request for creditor protection, known as a reconstruction.
Saab hopes protection from creditors will allow it to survive until China's authorities approve a 245 million euro ($336 million) investment by car firms Zhejiang Youngman Lotus Automobile and Pangda (601258.SS).
Saab, which owes August wages to workers and 150 million euros to suppliers, sought protection this month, but was turned down by a lower court.
The new decision overruled that.
Netherlands-listed Swedish Automobile backed up its appeal by pointing to, among other things, agreement for 70 million euros of financing with the help of a guarantee from Youngman.
Three unions representing workers at Saab have sought the company's bankruptcy to activate a state scheme to pay wages.
Creditor protection also activates that scheme and also halts the unions' bankruptcy filings.
"Now the company and its employees will get a much-needed breathing space systematically to develop a long-term business plan," blue collar union IF Metall chairman Stefan Lofven and the IF Metall Saab chapter head Hakon Skott said in a statement.
Muller also said the court decision meant employees could get paid by the weekend.
The creditor protection last three months but can be extended. The court appoints an administrator and meetings are also held with creditors.
Saab had creditor protection while it was owned by GM and that led to a writeoff of debts, but Muller has said Saab will honor all its obligations.
Production at Saab has been more or less at a standstill since April when unpaid suppliers pulled the plug on deliveries.
Sweden's debt collection agency had already begun seizing assets at the behest of unpaid suppliers, but the court decision stops that too.
"For months and months it's been a question of hoping, now this buys them time," said Tom Muller, analyst at Dutch private bank Theodoor Gilissen.
"I hope the Chinese partners will pay the money and buy the company eventually. I don't know whether the Chinese will buy the company's technology and just produce it in China, and not buy the Saab operations in Sweden," he added.
(Reporting by Johan Ahlander. Editing by Jane Merriman and Hans-Juergen Peters)
- Abbas-led Palestinian body backs Hamas truce demands in Gaza |
- UPDATE 4-Train carrying MH17 bodies reaches government-held Ukrainian city
- Rebels likely downed Malaysian jet 'by mistake': U.S. officials
- Islamic State crushes and coerces on march towards Baghdad
- Microsoft sees end to Nokia losses, shares rise after hours