The way events were unfolding these past few weeks, and from the moment its CEO admitted reorganization was an option, it was inevitable: Saab Automotive NV, which includes Saab Automobile AB, Saab Automobile Powertrain AB and Saab Automobile Tolls AB, filed for voluntary reorganization today at the District Court of Vanersborg in Sweden.
Saab’s goal is to secure protection from its creditors while it submits a viable reorganization plan until the Pang Da and Youngman deal, which has been signed off since July, is approved by the Chinese authorities and cash flow is restored. The initial period of court protection will be three months and, if required, can be extended for up to twelve months.
If approved, the court will appoint an administrator who will apply for the Swedish government’s guarantee that will allow payments to all Saab workers. Saab will also ask for the support of its creditors while the company’s reorganization plan is implemented, something it is confident it will get since it plans to fully pay all of its obligations.
Saab’s CEO, Victor Muller, said: “We have concluded that a voluntary reorganization process will provide us with the necessary time, protection and stabilization of the business, allowing salary payments to be made, short-term funding to be obtained and an orderly restart of production to be prepared.”
The reorganization plan has already been formulated and will be presented in three weeks to the Swedish firm’s creditors. It contains a blueprint of how Saab management will restructure the company in order to become independent and competitive. However it covers only the aforementioned divisions: all overseas entities, like Saab Great Britain and Saab North America, are not included in the plan.
