Saab plea for Court Protection dismissed – owes €150 million to creditorsThu, 08 Sep 2011 00:00:00 -0700
Saab denied Court Protection - there seems no way out
We hoped Victor Muller had found a way out of Saab’s financial woes by applying to the Swedish Courts for protection from its creditors while it waited for funds from China to arrive. But the application has hit a brick wall.
The district court in Vanersborg said in a statement that there was no reason to believe protection and reorganisation would work for Saab. Which is a crushing blow for Saab and its employees and suppliers.
That decision may in part due to the growing belief that Chinese companies Pangda Automobile Trade Co. Ltd and Zhejiang Youngman Lotus Automobile will not gain the necessary Chinese Government approval to invest €245 million in Saab for a majority stake.
When the deal with Youngman and Pang Da was agreed earlier in the year, Saab had a market capitalisation of €66.7 million, but has now fallen to just €14.8 million. It seems increasingly unlikely the Chinese firms will be allowed to invest in a business that seems to have as much of a future as a lone rat in a barn full of Jack Russells.
Not surprisingly, Victor Muller has said he will appeal the decision, but with €150 million due to suppliers – and no wages paid in August, there seem no realistic options left.
Stefan Lofven, head of, Swedish union IF Metall which represents many Saab employees, said:
We will now thoroughly analyse the new situation. If the company doesn’t find another solution or files a bankruptcy request themselves, we may be forced to do that in the next few days.
It looks bleak for Saab.
By Cars UK