Saab Files for Protection From Creditors in Swedish Court
ZEEWOLDE, THE NETHERLANDS – Saab Automobile AB and its subsidiaries, Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile), filed for voluntary reorganization in Sweden. Swedish Automobile N.V. (Swan), the parent company of Saab Automobile, made the announcement.
The announcement was described by the company as filing for "protective action to secure the Saab entity" in a statement.
The voluntary reorganization process will cover Saab Automobile AB, Saab Automobile Powertrain AB and Saab Tools AB. Saab Cars North America and other overseas subsidiaries are excluded from the reorganization.
Saab North America made a statement on its website, saying that operations will continue as normal.
According to Saab, the proposed voluntary reorganization will be a self-managed legal process, under Swedish law. The process will be headed by an independent administrator appointed by the court who will work with Saab Automobile’s management team.
Saab Automobile has formulated a reorganization plan, which focuses on lowering its cost-base and creating a competitive organization. Saab said it will present the plan to creditors three weeks after the filing, although this period could be extended by the court, according to the company.
Once the court gives Saab approval to move forward, the reorganization will occur over an initial period of three months. If required, Saab said the reorganization period can be extended by another three months, up to a maximum of 12 months.
The court-appointed administrator will apply for the Swedish state’s wage guarantee program to allow Saab Automobile employees to receive wages. The company said its employees’ August salaries will be paid within a short timeframe, following the court approval. Saab said it will seek support from creditors for the reorganization process.
Victor Muller, CEO of Swan and CEO and Chairman of Saab Automobile, made the following comments regarding the announcement:
“Since securing the long-term funding through conditional agreements with Pang Da and Youngman, who both support this voluntary reorganization, we have focused on securing funding to bridge the period until we receive their funds. We have concluded that a voluntary reorganization process will provide us with the necessary time, protection and stabilization 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 reorganization process will no doubt present us with a number of tough issues and decisions, I believe that Saab Automobile 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.”
“I would also like to express my deep gratitude to our employees, dealers, suppliers and all other stakeholders who have been so patient and understanding in the past trying months. I realize that we have severely tested their patience, but it has been heartening to see that in general, our employees, dealers, suppliers and other stakeholders have stood by us through this tough period. I look forward to continuing these relationships and collectively start building a brighter future for Saab Automobile.”
Ally Financial Inc.'s Swedish subsidiary, GMAC Financial Services AB, is a creditor of Saab Automobile AB. The company said it’s taking steps to protect its interests during the reorganization process. Ally did say it will continue to provide automotive financing products and services during the reorganization process.
Earlier this year, Saab had secured financing from Swedish real estate investors to sell and lease back the company’s property for $40 million. The automaker said it had raised approximately $87 million in funding, including the $40 million from this deal. Saab also announced it signed an agreement with Zhejiang Youngman Passenger Car Group Co., Ltd. (a.k.a. Youngman) to form a Sweden-based joint venture to develop three new Saab models
Source: Saab Automobile AB