SWEDEN: Saab bows to inevitable and files for reorganisation
Saab has filed for voluntary reorganisation from today (7 September), a move that will avoid any immediate move by unions to apply for the cash-stricken automaker's bankruptcy.
A statement from Trollhättan noted that due to Saab's "current limited financial resources," the reorganisation will allow short term stability and time to attract additional funding pending contributions from Pang Da and Youngman.
A plan will be presented to creditors within three weeks, although the District Court in Vanersborg may take the view this period should be extended.
The Saab statement continued: "Following court approval, the voluntary reorganisation will be executed over an initial period of three months. If required, the reorganisation period can be extended by another three months, up to a maximum of twelve months. Swan and Saab Automobile are confident that they will secure additional short-term funding for the reorganization period and are currently in negotiations with several parties about obtaining such funding.
"Funding for Saab Automobile to exit reorganisation has been secured through binding agreements with Pang Da and Youngman as announced on 4 July, which agreements are, however, subject to obtaining certain approvals."
The move will now allow Saab to apply for the Swedish State's wage guarantee scheme to allow salary payments to all employees to be made. August salaries are expected to be paid within a short time frame following the court approval. As for outstanding debts to creditors, Saab says it would "seek the support of its creditors," with the aim of settling accounts in full.
The voluntary reorganisation process will cover Saab Automobile, Saab Automobile Powertrain and Saab Tools. All other entities, including Saab Parts and all overseas entities such as Saab Great Britain and Saab Cars North America, are excluded from the reorganisation.
"Since securing the long-term funding through conditional agreements with Pang Da and Youngman, who both support this voluntary reorganisation, we have focused on securing funding to bridge the period until we receive their funds," said Saab CEO Victor Muller. "We have concluded a voluntary reorganisation process will provide us with the necessary time, protection and stabilisation of the business, allowing salary payments to be made, short-term funding to be obtained and an orderly restart of production to be prepared."
"While the voluntary reorganisation process will no doubt present us with a number of tough issues and decisions, I believe Saab will emerge stronger from this process. The potential for Saab Automobile as a viable, independent premium car manufacturer is there, as shown by the rejuvenation of our product portfolio, approximately 11,000 orders and the conditional long-term funding already in place through the binding agreements with Pang Da and Youngman that will give us access to the Chinese market."