AMSTERDAM/STOCKHOLM (Reuters) - Swedish carmaker Saab faced a fresh threat to its existence on Wednesday when a court-appointed administrator said its protection from bankruptcy should be removed due to a failure to secure Chinese investments.
Saab, one of Sweden’s best-known brands, has been teetering on the brink since early last year when a cash crunch forced it to halt production. It currently has court protection from creditors and possible bankruptcy claims.
Owner Swedish Automobile has forged a series of deals in a bid to save the carmaker, but former owner General Motors (GM.N), which still sells Saab technology, has vetoed a new deal with Chinese investors Pang Da Automobile Trade Co (601258.SS) and Zhejiang Youngman Lotus Automobile.
“Since the required funding has not been received and the stated schedule not been kept, the (Saab) companies lack the ability to pay upcoming liabilities ...,” court-appointed administrator Guy Lofalk said in a statement, asking the court to end creditor protection process.
He also cited General Motors’ unwillingness to approve proposed deals.
Saab has not produced any cars for months as its main factory in Trollhattan, Sweden, has been shut due to unpaid bills. It also failed to pay salaries due on November 25.
Vanersborg District Court in west Sweden said Saab and its creditors had until December 15 to submit their views on Lofalk’s request. It would make a decision the day after.
Ending protection from creditors would open the way for them to file for Saab’s bankruptcy. The court already has one claim, which is under suspension.
General Motors Co said on Tuesday it would not support a proposed ownership structure for Saab that included a Chinese bank, moving the Swedish auto company closer to liquidation.
Swedish Automobile SWAN.AS said on Wednesday it still hoped it would receive the funding needed for the reorganization to continue.
“The management of Saab Automobile will consider future steps and continues the current discussions with Youngman about the necessary funding to pay the wages and be able to continue the voluntary reorganization,” it said in a statement.
GM has said it would be difficult to support a sale of Saab that hurts GM’s competitive position in China and other key markets. Without GM’s technology licenses and production contract, analysts have said, Saab would be unable to continue in its present form.
Editing by Helen Massy-Beresford