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Saab now bankrupt

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26th December, 2011

Saab Automobile AB (Saab Automobile), Saab Automobile Tools AB and Saab Powertrain AB filed for bankruptcy with the District Court in Všnersborg, Sweden last week.

Having received the position of General Motors on the contemplated transaction with Saab Automobile, Youngman (a party to the intended buy-out) informed Saab Automobile that the funding to continue and complete the reorganisation of Saab Automobile could not be concluded. The Board of Saab Automobile subsequently decided 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 the filing and appoint receivers for Saab Automobile.

Swedish Automobile N.V. (owners of Saab) does not expect to realise any value from its shares in Saab Automobile and will write off its interest in Saab Automobile completely.

The financially troubled Swedish car maker had been intensely negotiating with two Chinese companies (Pang Da Automobile Trade Co., Ltd. and Zhejiang Youngman Lotus Automobile Co., Ltd.) to take-over Saab Automobile. However, General Motors (the previous owner of Saab) continued to have a say on who, if anyone, could use GM technology in Saab products. GM were unwilling to permit the Chinese companies to use GM technology. There has been no statement to clarify the GM decision. On that basis, it isn't known if the GM decision is based on supply, competition, financial or other issues.

Saab production lines have been idle since April 2011.


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