News - Saab
Court rejects Saab revival plan
Saab to “throw kitchen sink” into appeal against court decision on reorganisation
9 Sep 2011
SWEDISH car company Saab Automobile’s application for court-protected voluntary reorganisation under an administrator was rejected last night by a Swedish court on the grounds that its proposed rescue plan is insufficient to provide a good chance of survival.
Company chairman and CEO Victor Muller responded by saying it would “throw the kitchen sink” at an appeal against the decision, using “all the legal firepower available in this country”.
The appeal application is expected to take a week, exposing the fragile company to bankruptcy applications by aggrieved creditors, including unions representing unpaid workers.
The district court took just 29 hours to reject the application to appoint an administrator for an initial three months and grant the failing company protection from such bankruptcy actions under Swedish law.
Announcing Saab’s reaction to the court’s decision, a disappointed Mr Muller described the current situation as a nightmare, and that Saab would now advance to ‘plan C’ – the appeal.
He said the court clearly did not think the €245 million ($321m) in funding from backers – including Chinese companies Pang Da and Zhejiang Youngman – was insufficient to see Saab through its reorganisation.
“We will put more emphasis on that in the appeals application,” Mr Muller said.
Mr Muller said he doubted stakeholders would bring bankruptcy actions in the week it would take Saab to put together its appeal application, but even if they did, an appeal would be heard before any bankruptcy action.
“We appeal to all stakeholders to hold their horses until the appeal can be heard,” he said.
Asked what he would do if the appeal failed, Mr Muller said “go to plan D”, adding that he would fight for Saab until it was saved or bankrupt.
“I will go on until there is no other way,” he said.
Left: Saab's Trollhattan production line. Below: Saab chiefs unveils the Phoenix concept car at Geneva.
Official Saab blogger Steven Wade – an Australian from Hobart who was in Saab’s Trollhattan headquarters when the news broke – told readers of his inside.saab.com website that workers seemed shellshocked by the decision.
“I’m sure the decision today flattened almost everyone at Saab,” he said. “Everyone I saw and spoke to in the half hour after the decision looked just as shell-shocked as I felt.
“That’s not just the level of belief we had in our submission, it’s the belief we have and the desire that we have to see this company succeed.”
Mr Muller, a lawyer, said he thought Saab had provided sufficient information to convince the district court to grant the application for voluntary administration, but “that clearly was not the case”.
He said the appeal application would be overloaded with information to ensure the court had everything it needed to view it in a positive light.
Asked what the appeal would be based on, he replied: “We have a week to think about it”, adding: “There are many grounds to have the decision overturned.”
Mr Muller said the company first had to apply to lodge and appeal, and then make the appeal, which he said would “take some time”.
Saab’s main car factory in Sweden has been idle since April, due to a lack of parts from suppliers waiting to be paid.
Saab had hoped voluntary reorganisation protection would allow the company to restart the assembly line, as suppliers would be required to deliver components as long as they were paid.
Saab also hoped to restart production of its new 9-4X SUV at General Motors’ plant in Mexico by paying GM outstanding funds, thereby generating cash-flow from sales in North America, where it has thousands of unfilled orders.
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