Saab shifting more closer towards bankruptcyThursday, 20 October 2011
Saab Automobile is about to be thrown into bankruptcy gap again as the company’s application for re-organisation seem to be on its way to be thrown out of court.
The lawyer in charge of the re-organisation, Guy Lofalk no longer believes in that the re-organisation of the company is possible and wants it cancelled. Saab on the other side has been trying to replace Lofalk on ground that he had lost the support of the company.
A month after the Court of Appeals gave the go-ahead for the company’s re - organisation, Guy Lofalk wants to stop it, according to a press release from Saab owners Swedish Automobile.
He had carried out similar mission in 2009 when Saab went through reorganization that neither the District Court nor Court of Appeal considered was successful.
Now it's up to the court in Vänersborg to determine whether the reconstruction should be stopped.
This activates the dormant bankruptcy applications and there will be bankruptcy proceedings, normally within two weeks should the court determine that the re-organisation is no longer feasible. In addition, the Swedish debts enforcement Authority is to continue its foreclosures and is starting the sale of cars in the Saab Museum.
AdvertisementSaab's plan for the success of reconstruction has been built entirely by the view that the Chinese companies, Youngman and Pang Da would be able to inject billions into the company. This required the crucial approval from NDRC in China to come as quickly as Saab had hoped. But the Chinese for various reasons have decided to drag their feet from the company.
It now stands that Guy Lofalk, the administrator of Saab Automobile, has already submitted an application to Vänersborg court that the reconstruction of Saab should be stopped.
"There is not enough money to continue the reconstruction, "said Lofalk to Reuters.
He says that the 70 million dollars that the U.S. private equity firm North Street Capital promised to invest in Saab, a statement that came on Thursday, was far from sufficient to continue the reconstruction.
Guy Lofalk said further to Reuters that Saab's Chinese partner Youngman and Pang Da were keen to buy Saab, but have failed to reach an agreement with Saab's current owner, i.e. the Swedish Automobile.
"I can only say that the parties failed to reach a purchase agreement, "said Lofalk.
He reveals, too, perhaps a little surprisingly, that the Chinese authorities told him that the two Chinese companies have enough financial muscle to save Saab. But it's still the case that Chinese authorities (National Development and Reform Commission, NDRC) must give the green light to a possible ownership of Saab.
Guy Lofalk said in an interview with Reuters that there is still a proposal for a solution that could save Saab.
"The Chinese have presented a complete solution that would be a rescue for Saab. I have met with the Chinese authorities and they have told me that Youngman and Pang Da have sufficient resources to do what it takes, "said Lofalk to Reuters.
Lofalk answer "yes" when asked if the proposal means that Youngman and Pang Da could buy Saab.
"There is a proposal which, if realized, would save Saab and ensuring production in Trollhattan, "he says.
According to information from various Swedish media outlets, Victor Muller and Guy Lofalk are in logger heads. Lofalk is accused on by passing Muller and going straight to negotiate with the Chinese.
By Scancomark.se Team
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