Swedish court approves carmarker's appeal for "reorganization"
After Saab’s request for “reorganization” was approved by a Swedish court today, the carmaker has announced that it will look to restructure itself as an independent entity.
This move is the first step in a process that would allow Saab to restructure itself and renegotiate terms with creditors. This, after Saab said it estimates a loss of $340 million last year and expects a similar loss for 2009.
“We explored and will continue to explore all available options for funding and/or selling Saab,” said Managing Director Jan-Ake Jonsson. “It was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment.”
The move comes after General Motors announced in its viability plan submitted to the U.S. Treasury that it would not cover further losses at Saab, but that it would assist financially in the reorganization process. A request to the Swedish government, asking it to take over Saab was also rejected.
General Motors has put forth a “substantial” amount of money to help Saab and has asked the Swedish government for loan guarantees of $600 million to keep Saab afloat. GM has also agreed to help with development and tooling costs of the new 9-5,94x and 9-3x which are scheduled for launch in the next 18 months.
Saab has also applied for 500 million euros from the European Investment Bank and is looking for private investors.
The independent Saab would be centralized in Sweden with design, engineering and manufacturing all taking place in that country.
Saab, which currently employs 4,000 people in Sweden, was sold, in part, to General Motors in 1990, with GM taking full control in 2000. Since the purchase the Swedish automaker has only turned a profit once.
Official Saab Release After the jump:
Saab Automobile on the way towards independence
– ”today is the beginning of a new chapter in Saab’s history”
After 20 years of foreign ownership, the future of Saab Automobile is once again in Swedish hands. On Friday, the Vänersborg District Court approved the request for a reorganization and restructuring which Saab’s representative submitted earlier in the morning.
“Today is the beginning of a new chapter in Saab’s history”, says Jan Åke Jonsson, Managing Director of Saab Automobile. “We are now recreating Saab Automobile as an independent unit. The road ahead will not be easy. Many have already suffered considerably as a result of the crisis in the automobile industry and sacrifices will be a part of our future, but after a period of tough decisions we will have laid the foundations for a new beginning.
“Saab has a trademark which is well established both in Sweden and internationally. We have a documented efficient production and we have a strong range of models in development. That is why we have chosen this road. The future will be tough, but the commitment which exists to support the Swedish automobile industry and Saab will help us in the arduous tasks which lie ahead of us.”
The work of piloting the new Saab Automobile into the future will be led by a group of three persons: the lawyer Guy Lofalk, whom the District Court has appointed as Administrator, the Managing Director Jan Åke Jonsson, and the international reorganization expert, Stephen Taylor.
The purpose of the company reorganization is to create a short-term stability that will make it possible to develop a long-term solution for Saab. The Swedish Company Reorganization Act says that an application shall not be approved unless there is reasonable cause to assume that the purpose of the reorganization will be achieved. In today’s decision, the District Court has found that such conditions exist.
“I can already say that I am impressed by the competence within Saab”, says Guy Lofalk, “and with three strong automobile models just around the corner it would be a waste not to try to find a long-term way forward.”