Saab was trying to win some time and complete a deal with Chinese investors. However, the Vänersborg district court ruled that it could not see how the Swedish automaker could secure additional funding to continue its operations.
“It appears unclear if –and if so, when- the relevant Chinese authorities will approve the agreements”, the court said.
Saab issued a short statement saying that it will appeal the court's decision.
Saab Statement:
"Swedish Automobile N.V. (Swan) announces that the District Court in Vänersborg, Sweden today rejected the proposal for voluntary reorganization by Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile). Saab Automobile is disappointed with the ruling and will appeal the District Court’s decision.
Swan will update the market tomorrow on further developments."
The reorganization plan involved Saab Automobile, which includes Saab Automobile AB, Saab Powertrain AB and Saab Automobile Tools AB, but left out all other subsidiaries.
The company’s CEO, Victor Muller and even Saab North America’s president, Tim Colbeck, were previously confident that despite the massive problems which included unpaid bills and a long-standing production halt at the factory, things would eventually work out as they had in the past for companies that faced similar problems, like GM and Chrysler.
However, in Saab’s case, the Swedish government isn’t willing to intervene like the US did in the massive GM-Chrysler bailout. Moreover, Muller's efforts to secure short-term financing until the Pang Da and Youngman deal was ratified proved fruitless.
If the outcome of Saab's appeal is the same as the original ruling, then it could signal the end of the road for the Swedish manufacturer after a 64-year-long history.
It will also mean that 3,700 workers at Saab’s Trollhättan plant will automatically become unemployed, while the company’s 800 suppliers stand to lose the €150 million (US$210 million) the automaker owns them and that could lead to more layoffs.
Story sources: Saab, The Guardian, BBC
