March 2, 2021

Saab Files for Bankruptcy Protection

Saab Automobile and two subsidiaries, Saab Automobile Powertrain and Saab Automobile Tools, filed for “voluntary reorganization” with the District Court in Vanersborg, Sweden, according to a statement from Saab’s parent company, Swedish Automobile, which is based in Zeewolde, Netherlands. Overseas units are not affected by the filing.

The companies “are of the opinion that, considering Saab Automobile’s current limited financial resources, a voluntary reorganization will entail the best preconditions for using existing resources in the most efficient way,” the statement said.

Swedish Automobile, formerly known as Spyker Cars, bought Saab from General Motors in 2010 with plans to turn the company around. But Saab, whose cars had a relatively small but enthusiastic following, has struggled simply to stay afloat, missing payrolls and shutting down production at its main Trollhattan, Sweden plant since June because suppliers refused to continue providing credit.

Faced with uncertain prospects for recovery, Saab’s employees are growing increasingly anxious. They have not been paid for August, and were paid late for both June and July. Unions have been considering a legal challenge that could have led the company into bankruptcy.

As part of the three-month reorganization plan, Saab’s court-appointed administrator will ask the Swedish government to guarantee that all Saab Automobile employees be paid, though the company will have to repay the state. The company also said it hopes to gain the support of creditors for its plan, as it is aiming to fully reimburse them.

Unions said the company’s maneuver would forestall their legal action.

“The decision to seek reorganization can be a positive solution for Saab,” Stefan Lofven, an IF Metall union spokesman, said in a statement. He called on the court to deal swiftly with the company’s application “so union members can get a quick decision on whether they will be paid under the state guarantee.”

Saab has signed what it called “binding agreements” with two Chinese partners this year, but said it has not yet received any of the promised investments.

Zhejiang Youngman Lotus Automobile agreed in June to pay €136 million, or $191 million, for a 29.9 percent stake in Swedish Automobile. Pang Da Automobile Trade said in May that it would pay €109 million for 24 percent of Swedish Automobile.

Saab said that the Chinese deals remained “subject to obtaining certain approvals.” It did not elaborate, but Chinese companies investing abroad must first obtain the approval of China’s National Development and Reform Commission, something that has not yet been forthcoming.

A previous deal with another Chinese company, Hawtai, foundered after it was denied approval.

Both Chinese companies support the filing, Victor Muller, chief executive of both Saab and the parent company, said in the statement.

“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,” Mr. Muller said.

A spokeswoman for the company, Gunilla Gustavs, declined to comment on the amount of bridge financing required. She stressed that Saab is not seeking to shed debt in the reorganization, and remains a going concern.

Liu Shibo, a spokesman in the Beijing office of Pang Da, had no immediate comment but said the company was planning to release a statement later.

Zhejiang Youngman Lotus, part of the China Youngman Automobile Group, had no immediate comment.

Trading in Swedish Automobile shares, which have fallen almost 80 percent this year, was suspended Wednesday on the Amsterdam exchange.

“While the voluntary reorganization process will no doubt present us with a number of tough issues and decisions, I believe that Saab Automobile will emerge stronger from this process,” Mr. Muller said in the statement.

He cited “the rejuvenation of our product portfolio, approximately 11,000 orders,” and the deals with Pang Da and Youngman “that will give us access to the Chinese market.”

Pang Da has one of the biggest chains of car dealerships in China. The 470,000 cars it sold last year account for nearly 3 percent of the Chinese market.

Keith Bradsher and Hilda Wang contributed reporting from Hong Kong. William Rankin contributed in Paris.

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