Carmaker Saab files for bankruptcy

2011-12-19 11:10

Saab Automobile filed for bankruptcy today, a Swedish district court told AFP, bringing to an end two years of efforts to rescue the iconic brand that manufactured cars for six decades.

The final desperate efforts to organise help in China were obstructed by Saab’s former owner General Motors over licences.

“They were here this morning and submitted the documents requesting bankruptcy,” a clerk at the Vaenersborg district court told AFP, adding that the court was currently examining the request.

Saab’s owner Swedish Automobile said in a statement that “the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors.”

“It is expected that the court will approve of the filing and appoint receivers for Saab Automobile very shortly.”

Swedish Automobile’s charismatic chief executive Victor Muller had been due to appear before the court oday as judges had been scheduled to decide whether to lift or prolong the three-month bankruptcy protection Saab had been placed under while it was attempting to negotiate a deal to rescue the company.

Muller had been struggling to clinch an agreement in recent months with two Chinese groups, carmaker Youngman and car distribution company Pang Da.

But General Motors has repeatedly said it would refuse to agree to the necessary technology licence transfers to the Chinese firms, and Pang Da pulled out of the negotiations a few weeks ago.

As recently as this weekend, GM reiterated its opposition to any deal with a Chinese suitor, a statement seen as a death knell for Saab.

“Saab’s various new alternative proposals are not meaningfully different from what was originally proposed to General Motors and rejected,” GM spokesperson James Cain said.

“Each proposal results either directly or indirectly in the transfer of control and/or ownership of the company in a manner that would be detrimental to GM and its shareholders. As such, GM cannot support any of these proposed alternatives.”

Swedish Automobile said Youngman pulled out of the talks following Cain’s remarks.

“After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganisation of Saab Automobile could not be concluded,” it said.

The attempts to sell Saab to Chinese partners have been seen as the last chance of saving the carmaker, which was already on the brink of bankruptcy when GM sold it to Swedish Automobile – at the time called Spyker – in early 2010 for $400 million (about R3.35 billion).
It has been a rocky road since then.

The carmaker – which began life in 1937 as an aircraft manufacturer, something which became evident in the aerodynamic, sporty shape of its first concept car designs – was forced to halt production in April as suppliers stopped deliveries over mountains of unpaid bills.

Saab’s some 3 700 employees, whose salaries have been delayed five months running, did not receive their November paycheques. Once the bankruptcy filing is approved, they will be paid through a state wage guarantee.

Saab built its first prototype cars in 1947 with the first production version rolling off the assembly line two years later.

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