Swedish carmaker Saab files for bankruptcy after failure to secure funding

By This Is Money Reporter

Last updated at 6:40 PM on 19th December 2011

Saab filed for bankruptcy today after former owner General Motors blocked moves by the ailing Swedish car company to secure funding from potential Chinese investors.

Victor Muller, chief executive of Netherlands-based group Swedish Automobile, which owns Saab, submitted the application in person, the Vanersborg District Court said.

A cash crisis saw Saab suspend production in March after it failed to pay suppliers. It has only occasionally restarted assembly lines since then. It has delayed wages several times and has yet to give workers pay that was due at the end of November.

It had been shielded from its creditors under a Swedish legal arrangement designed to give it time to secure rescue funding. But the court today said any realistic hope of a deal had gone.

A cash crisis saw Saab suspend production in March after it failed to pay suppliers. It has only occasionally restarted assembly lines since then

A cash crisis saw Saab suspend production in March after it failed to pay suppliers. It has only occasionally restarted assembly lines since then

Saab, which was sold by General Motors sold to Swedish Automobile last year, was in talks with Zhejiang Youngman Lotus Automobile and a Chinese bank about investment to allow it to continue trading.

However, no deal could go ahead without the agreement of GM which still retains part of the group as well as many of its technology licenses.

In recent months, GM had rejected all deals that would see Chinese carmakers take control of Saab on the grounds they would be detrimental to its interests.

 

Swedish Automobile said that the court is expected to approve the filing and appoint receivers for Saab very shortly.

Earlier this month, the carmaker’s administrator called for an end to creditor protection saying that the company had run out of money.

 

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My daughter has an old 1997 Saab 900S (she still has it), it has outlasted my last 2000 GM, which was junked 3 years ago. I will never own a GM again. I must say, my daughter is still laughing about my $38,000 POS which died at 127,00 as opposed to her 210,000 mile and still ticking Saab.

Click to rate     Rating   1

China just slapped huge tariffs on GM cars because they are so successful in China. Tit for tat I wouldn't be surprised (and don't imagine that big biz is above childishness).

Click to rate     Rating   1

Maybe there are still potential buyers out there. I was thinking of the Gulf, South America or one of the many international investors with pots loads of money. SAAB are at the top end of the car market and deserve to stay there.

Click to rate     Rating   3

First the idiots at GM ruined Saab with their pathetic joke badge engineered cars and now they let the company crumble by not agreeing to alternative funding. Why people even buy GM junk is beyond me.

Click to rate     Rating   20

Odd that FORD sold VOLVO to the Chinese and that GM has a successful Chinese joint-venture in China....but China remains a threat to GM? Something missing in this decision by GM....expecting trade war or maybe they shorted SAAB to make a fast buck...after thats what financial markets function as these days....betting on failure!

Click to rate     Rating   19

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