TROLLHATTAN, Sweden/AMSTERDAM (Reuters) - Saab lurched further into crisis on Monday as two of the cash-strapped Swedish car maker’s own unions served bankruptcy applications despite the company having conjured up a promise of 70 million euros ($96 million) in vital financing.
Two white-collar unions at Saab, whose members had their June and July salaries delayed and have not yet been paid for August, said their patience had run out and that they were using their right to apply to put Saab into bankruptcy.
“This is not a situation that any member of Unionen wishes to be in,” said Cecilia Fahlberg, chairwoman of the union, after the application.
The move came after Saab announced the latest in a long line of money-raising exercises led by Chief Executive Victor Muller, saying it had arranged 70 million euros in bridge financing with the help of a Chinese guarantee.
Saab hopes the money will help persuade a Swedish court to give it protection from creditors for the second time in 2-1/2 years while it restructures. A lower court has rejected Saab’s case, but the company lodged an appeal on Monday.
Saab said the lower court had been too tough in its judgment and added it expected Chinese authorities to back a 245-million euro investment by car firms Pangda Automobile Trade Co Ltd (601258.SS) and Zhejiang Youngman Lotus Automobile.
“The approval process is expected to be finalized early November. Youngman and Pangda intend, after the initial equity contribution, to contribute with additional capital,” Saab said.
The Vanersborg district court said it would pass on the appeal to the Court of Appeal for western Sweden on Tuesday.
Swedish Automobile SWAN.AS shares, up about 50 percent before the financing announcement, were up 123 percent by 1517 GMT at 0.781 euros.
The 60-year-old car maker, owned by Netherlands-listed Swedish Automobile SWAN.AS, has staggered from one crisis to another in the last few months. Its production line is halted and it owes money to suppliers and staff.
Unionen, representing 1,100 staff, said the court would take three to five weeks to decide on the bankruptcy application for Saab, which Swedish Automobile, then called Spyker, saved from closure by General Motors (GM.N) in early 2010.
A smaller white-collar union, Ledarna, representing 126 people, also handed in an application. Both unions say bankruptcy is the only way to ensure the activation of a state wage-insurance scheme.
The main blue-collar unions have said they will hold back with their bankruptcy filings.
Unionen stressed its application would be dropped if Saab paid salaries, and that court protection would also freeze the process. It will also try to help Saab win the appeal.
The new money raised by Saab came from a technology license agreement with a special purpose vehicle, or SPV.
As part of the deal, Chinese car maker Youngman has also signed a technology license deal with the SPV, providing a guarantee for its payment.
Swedish Automobile said the deal was part of a bridge loan which it intended to repay with proceeds of the 245-million euro equity investment promised by China’s Pangda and Youngman.
“This will be ammunition in the court case, but it won’t be enough if all the suppliers combined already claim more than 100 million euros in bills,” David Tomic, economist at Dutch shareholder group VEB, said.
Muller has said Saab owes suppliers 150 million euros.
“As a company it is hard to keep alive. If you look at the man (Muller), he has shown in the past (he has tried) to keep a company going using all kinds of tricks,” Tomic said. “Muller may still bring in support from somewhere.”
($1 = 0.729 Euros)
Additional reporting by Aaron Gray-Block and Sara Webb in Amsterdam and Patrick Lannin in Stockholm; Editing by David Holmes