It will be a NO for Saab’s reconstruction application – Next stop Bankruptcy application?


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Thursday, 08 September 2011
V´┐Żnersborg district court where Saab applied for voluntary reorganisation on the company has rejected Saab Automobile's request for reconstruction. Now chances are that the company pull will be shifting towards bankruptcy application.

The district court justified its decision to that the financial problems in Saab Automobile has   persisted since the last re – organisation of the company, although a number of measures taken to provide the company with capital but that on the basis of the application of reorganisation, its is unclear how the financial situation will be solved.

"Regular production stoppages would have resulted in significant loss of goodwill for the company and a weakening of the Saab brand, "the district court said.

Above all, according to the decision, it is unclear if and when the Chinese authorities will approve the contracts for companies that want to collaborate with Saab. They are Youngman and Pang Da who are expected to infuse money in the company.

Overall, the district court finds that the circumstances are such that the preconditions for the successfully reconstruction of the activities of any event in the company is not as better now than it was in 2009.

It is entirely possible that the company should start working on bankruptcy related moves after the district court's statement on Thursday.

Saab can certainly appeal to the Court of Appeal no later than 29th September and theoretically also to the Supreme Court. But an appeal offers no protection from bankruptcy petitions as long as there is no decision from the Court of Appeal.

The decision will be disappointing to subcontractors and some worker unions as if Saab goes bankrupt, many of then would loose more. A member of the workers union, AF Metall Darko Davidovic describes the district court's decision as disappointing.

"Especially for those employees who had the hope to quickly get their money and that the company would have a chance to get back on its feet, "he says Swedish business daily, Dagens Industri.

Saab’s workers have really been very loyal and despite Volvo next door have been flashing work advertisement in front of then, they have remain loyal hoping that Saab will turn around.

The best solution now is that Saab calls themselves bankrupt, unless the company can quickly find a solution to their financial problems, consider Darko Davidovic.

"For our members the best option now is that Saab calls themselves out of business, if there is no other solution. This will enable our members the fastest access to pay security, "said Darko Davidovic.

He Swedish Social Democrat party spokesman Lars Johansson regrets the decision.
He told Swedish news agency TT that “It is of course extremely sorrowful for the employees and subcontractors who are now not getting any money,” he said.
“The question now is how the government will act. I believe that it must sort out the issue of whether Antonov could be drummed in,” says Johansson.

Frederick Sidahl, president of FKG, the trade association for suppliers in the automotive industry, concluded that Saab Automobile is now moving towards bankruptcy.

“It's an incredibly tragic situation for Sweden. There is an obvious risk that we lose the momentum we had with both Saab and Volvo,” he told TT.
“Our members will not receive anything. Everything would have been better than this, now they’ll do nothing,” siad Fredrik Sidahl.

From the government’s side, Maud Olofsson minister of industries is surprised by the district court's decision.
“It is very unusual for a district court says no to a reconstruction. We'll wait and see what the Saab management will want to do and also what the unions would want to do,” she said.
By Team

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