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UPDATE 1-Court rejects creditor protection for Saab carmaker NEVS
August 28, 2014 / 3:05 PM / 3 years ago

UPDATE 1-Court rejects creditor protection for Saab carmaker NEVS

(Recasts with court rejection of application for creditor protection, company reaction, rewrites)

Av Sven Nordenstam och Johannes Hellstrom

STOCKHOLM, Aug 28 (Reuters) - A Swedish court on Thursday rejected an application from China’s National Electric Vehicle Sweden (NEVS), which bought bankrupt car maker Saab in 2012, for protection against creditors while it concludes funding talks.

The court called the solutions NEVS had outlined to secure funding “vague and completely undocumented,” casting further doubt over the long-term future of the company, which has not built any cars in recent months due to a shortage of money.

“For instance, there is no reasonably exact information about financing needs over time or regarding the timing and size of funds that may be received,” the court said in a statement.

A NEVS spokesman said the company would appeal the decision.

NEVS, which last year resumed low-volume production of the marque, halted production in May saying it lacked enough cash to pay its outstanding debt.

The company has been in talks with two unnamed car firms to secure additional money and said earlier on Thursday it had filed the application.

“The tripartite negotiations we have with two global vehicle manufacturers are still progressing, but are complex and have taken more time than we predicted,” NEVS President Mattias Bergman said in a statement.

“We need additional time to complete the negotiations and reach an agreement.”

NEVS has about 900 suppliers, of which roughly 400 supply products and services directly linked to its production. While the vast majority have chosen to await the outcome of the negotiations, some creditors have filed for redress with the Swedish Enforcement Authority, the company said.

NEVS decided to file for protection because the Enforcement Authority could force mandatory asset sales, making finalising new funding more difficult. (Editing by David Clarke and David Holmes)

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