Saab applies for reorganization – buys time to avert full blown bankruptcy
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Wednesday, 07 September 2011
Saab Automobile applies for reorganization on Wednesday morning. It comes from the holding company Swedish Automobile in a statement.
The application of reorganization was be submitted at nine o'clock on Wednesday morning to V�nersborg, writes Swedish Automobile. At 14 o'clock, the district court's will reports whether the notice for reconstructions of the companies has been met with the court’s decision to grant reconstruction applications, or not. This will be look into by a bankruptcy judge, a judge and a magistrate in V�nersborg district court.
Because of the limited financial resources that exist, taking the option for reconstruction is the best position to use existing resources in the most efficient way, according to Swedish Automobile.
Subsidiaries Saab Automobile Powertrain and Saab Automobile Tools are also mentioned in the application for reorganization.
AdvertisementThe purpose of the reorganization is to secure short-term stability and simultaneously secure further funding, including from the Chinese stakeholders Pang Da and Youngman.
"While the voluntary reorganization process will undoubtedly involve many tough issues and decisions, I think that Saab Automobile will come out stronger from this process, "writes Victor Muller in a statement.
Victor Muller writes further that Saab has "great potential", which includes the binding agreements with Pang Da and Yongman, which provides access to the Chinese market.
As part of the reorganization process, Saab Automobile formulated a reorganization plan that includes a number of measures designed to reduce costs and to creating a "viable, competitive, independent organization," the company writes further.
Saab Management expects within three weeks to present a reorganization plan to its lenders with more details on how the process should be conducted.
Initially, it is applying to the court for a three-month grace period to implement the reorganization.
The court is now expected to appoint an administrator who will work together with the management of Saab Automobile. Saab suggests that the court appoints a lawyer Guy Lofalk to work with the administrator. It was he who conducted the 2009 reorganization of the company.
The company will also apply for government wage guarantees to employees during the reorganization so that workers wages should be paid. August salaries, which have not been paid, Saab expects that to be paid once the court has granted the request.
According to Saab chief executive, Victor Muller, both Pang Da and Youngman are behind the plan.
"Since we have secured long-term financing with a conditional agreement with Pang Da and Youngman, who both supports the voluntary reorganization, we have focused on securing funding to cover the period until we get their money, "writes Muller.
Subsidiaries Parts Saab AB, Saab Great Britain and Saab Cars North America are not subject to reconstruction application.
Trade in Swedish Automobiles shares, which tumbled nearly 80 percent since the beginning, was stopped on the Amsterdam Stock Exchange on Wednesday after news that the Saab owner applies for reorganization in V�nersborg.
By Scancomark.se Team
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