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UPDATE 2-Saab faces new bankruptcy threat, in crunch talks
October 11, 2011 / 10:41 AM / 6 years ago

UPDATE 2-Saab faces new bankruptcy threat, in crunch talks

* Vital funds still not arrived

* Administrator could throw in towel-report

* Saab says still expects money, won’t say when

* Swedish Automobile shares fall 6 pct

* China’s BAIC not interested in Saab restructuring - chairman (Changes dateline, adds more detail, Saab CEO, BAIC comments)

By Veronica Ek and Sara Webb

STOCKHOLM/AMSTERDAM, Oct 11 (Reuters) - The administrator in charge of Saab’s restructuring under court protection could pull the plug on the process as early as Tuesday, paving the way for declaring the auto maker bankrupt, daily newspaper Svenska Dagbladet reported.

Saab has struggled for months to stave off collapse, seeking new investors and selling off assets to pay suppliers and employees and resume production at its plant in Sweden.

Swedish news agency TT said the ending of the creditor protection process and possible bankruptcy was one of the options being considered at talks in Stockholm but that there were other alternatives.

Shares in Saab-owner Swedish Automobile fell 6 percent by 1240 GMT.

Saab has still not received a vital bridge loan of 70 million euros ($96 million) that was secured by Chinese car firm Zhejiang Youngman Lotus Automobile, money that is key to its short-term survival.

Saab spokeswoman Gunilla Gustavs said the car maker still expected to get the Youngman bridge loan.

The paper said the court-appointed administrator could decide as early as Tuesday to ask a court to end Saab’s period of protection from creditors. The administrator, Guy Lofalk, could not immediately be reached for comment.

If the restructuring process looks unlikely to succeed, Saab’s creditors, the administrator or Saab itself could ask for creditor protection to be withdrawn, Cecilia Tisell, a judge at the local court told Reuters. No such request had come in so far, she added.

Saab chief executive Victor Muller told Reuters in a phone text message: “Things are moving along fine and we do not intend to request the replacement of Mr Lofalk as administrator.”

Swedish media have reported tensions between Lofalk and Saab after Lofalk reportedly raised the idea that the government should take over Saab’s debt to the European Investment Bank in return for shares in the car maker, which it would then sell to a Chinese car producer.

Any decision to end the reconstruction process would be Lofalk‘s, Muller added.

Saab won breathing space from creditors in late September, but still needs fresh money. It had hoped protection from creditors would allow it to survive until Chinese authorities approve a 245 million euro ($336 million) investment by car firms Youngman and Pangda . A decision by China’s NDRC could come as early as Friday.

Youngman looks to be Saab’s last hope of surviving.

The chairman of China’s BAIC Group, which owns some rights to Saab’s old platforms, said it was not interested in rescuing the 60 year-old Swedish brand.

“We are not interested in getting involved in Saab’s restructuring,” Xu Heyi told reporters on the sidelines of an industry forum in the southwestern Chinese city of Chengdu.

Chinese car group Geely, which bought Volvo in 2010, denied reports last week that it was interested in Saab.

The paper also quoted Swedish Debt Office official Daniel Barr as rejecting reports that the government could pay off Saab’s debt to the European Investment Bank and convert the security on the loan to shares in Saab.

“No, the Debt Office does not have any such mandate,” he said. ($1 = 0.732 Euros) (Additional Reporting by Fang Yan and Ken Wills; Editing by Helen Massy-Beresford)

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