After a protracted battle for financial stability, Saab has filed for government protection. The official filing submitted this morning in Sweden isn't a liquidation, however, it's a bid for reorganization with the assistance of a government-appointed independent overseer. Saab boss Victor Muller:

"Since securing the long-term funding through conditional agreements with Pang Da and Youngman, who both support this voluntary reorganization, we have focused on securing funding to bridge the period until we receive their funds. 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."

Under Swedish law, Saab's reorganization plans must be presented within three weeks, though a court-granted extension is possible. If Muller and Co. clear this initial hurdle, the reorganization will have an initial three month window in which to be effected, although that window can be extended in three-month increments for up to a year. While Saab is busy trying to cut costs and rework its infrastructure, its emissaries will also be seeking short-term funding.

For its part, the Swedish government must accept Saab's filing for protection. Further, if the automaker wishes to stay in business, government officials will also need to agree to grant Saab access to the state's "wage guarantee scheme," meaning that Sweden must agree to pay the automaker's employee wages (including August) during the reorganization process. Check out the official press release after the jump.

Show full PR text

SAAB AUTOMOBILE AB FILES FOR VOLUNTARY REORGANIZATION, SAAB AUTOMOBILE PARTS AB AND OVERSEAS SUBSIDIARIES ARE EXCLUDED

Zeewolde, The Netherlands, 7 September 2011 - Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) will file for voluntary reorganization today at 09:00 CET with the District Court in Vänersborg, Sweden. Swan and Saab Automobile 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 eventual purpose of the proposed voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman.

The proposed voluntary reorganization will be a self-managed, legal process under Swedish law headed by an independent administrator appointed by the court who will work closely with the Saab Automobile management team. As part of the process, Saab Automobile has formulated a reorganization plan, which includes a number of aspects aimed at lowering its cost-base and creating a viable, competitive and independent organization. This reorganization plan will be presented to creditors in more detail within three weeks of the filing, although this period could be extended by the court.

Following court approval, the voluntary reorganization will be executed over an initial period of three months. If required, the reorganization period can be extended by another three months, up to a maximum of twelve months. Swan and Saab Automobile are confident that they will secure additional short-term funding for the reorganization period and are currently in negotiations with several parties about obtaining such funding. Funding for Saab Automobile to exit reorganization has been secured through binding agreements with Pang Da and Youngman as announced on July 4, which agreements are, however, subject to obtaining certain approvals.

As part of the reorganization filing, the court-appointed administrator will apply for the Swedish state's wage guarantee scheme to allow wage payments to all Saab Automobile employees to be made. August salaries are expected to be paid within a short time frame following the court approval. With regards to outstanding debts to creditors, Saab Automobile will seek the support of its creditors for the reorganization process and is confident it will obtain this support, particularly because Saab Automobile aims at full redemption of outstanding debts.

Saab Automobile has proposed that the District Court appoints Swedish lawyer Guy Lofalk as administrator, who also was the administrator in the successful 2009 Saab Automobile reorganization. Victor Muller, CEO of Swan and CEO and Chairman of Saab Automobile, and the Saab Automobile management team will cooperate closely with the administrator to execute the reorganization plan. The voluntary reorganization process will cover Saab Automobile AB, Saab Automobile Powertrain AB and Saab Tools AB. All other entities, including Saab Parts AB and all overseas entities such as Saab Great Britain and Saab Cars North America, are excluded from the reorganization.

The reorganization plan contains a blueprint of how Saab Automobile's Management expects to improve Saab Automobile's business model with an emphasis on an independent, lean and competitive organization. Many key elements of Saab Automobile's original business plan remain, as Management believes the objectives of the overall strategy remain intact. Through the roll-out of a fully rejuvenated product portfolio, partnerships with Chinese firms Pang Da and Youngman that will ensure access to the world's largest and fastest growing market, and a strong and global brand, Saab Automobile is well-positioned to realize its objective of becoming a viable independent premium car manufacturer.

Victor Muller, CEO of Swan and CEO and Chairman of Saab Automobile, said:

"Since securing the long-term funding through conditional agreements with Pang Da and Youngman, who both support this voluntary reorganization, we have focused on securing funding to bridge the period until we receive their funds. 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."

"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. The potential for Saab Automobile as a viable, independent premium car manufacturer is there, as shown by the rejuvenation of our product portfolio, approximately 11,000 orders and the conditional long-term funding already in place through the binding agreements with Pang Da and Youngman that will give us access to the Chinese market."

"I would also like to express my deep gratitude to our employees, dealers, suppliers and all other stakeholders who have been so patient and understanding in the past trying months. I realize that we have severely tested their patience, but it has been heartening to see that in general, our employees, dealers, suppliers and other stakeholders have stood by us through this tough period. I look forward to continuing these relationships and collectively start building a brighter future for Saab Automobile."


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 44 Comments
      Gopher
      • 3 Years Ago
      C'mon SAAB! You can't die on us, especially when your new 9-5 Aero SportCombi is the greatest looking wagon currently on the market (And possibly of all time)!
      guyverfanboy
      • 3 Years Ago
      Poor SAAB... when will there be good news?!
      artandcolour2010
      • 3 Years Ago
      I really hope they find a way out of this mess. I love Saabs. My old 900SE was one of my favorite cars ever. If it hadn't been totaled by a Montero whose driver was on her hand held cellphone, I'd probably still have it.
      DrEvil
      • 3 Years Ago
      Oh Saab. :((
      Doug
      • 3 Years Ago
      GM got rid of them in time. The bailout of GM could have been deeper in the taxpayers pockets.
        ty
        • 3 Years Ago
        @Doug
        More likely GM stripped them of cash and loaded em up with debt before dumping them like any good junk bond king.
      Pam
      • 3 Years Ago
      Tsk! It's private enterprise. No government help should be given. We've doled out more than enough money for private enterprise who don't know how to run their business decently. And, yes, I do sympathize with the employees who may lose their jobs!
        Kiiks
        • 3 Years Ago
        @Pam
        What jobs? It's not like the workers were being paid...
      • 3 Years Ago
      [blocked]
      Dvanos
      • 3 Years Ago
      Haven't they done this already?? How many times can you file for protection??
        avatar-ds
        • 3 Years Ago
        @Dvanos
        Probably any number of times if it helps them survive and keeps every party involved happy (i.e. creditors). They're filing for voluntary strategic bankruptcy but it doesn't mean it will necessarily lead to insolvency unless their maneuver fails.
        hackitoff
        • 3 Years Ago
        @Dvanos
        Remember this is Sweden.
      stkyrice
      • 3 Years Ago
      It would be nice if everyone read the article, unless you are Swedish living in Sweden, you the quote taxpayer(?) are not paying a dime. I just thought the record should be set straight. Of course I could be wrong, and we have a lot of people living in Sweden commenting on this article.
      carfan
      • 3 Years Ago
      what a shame, this car company is not being appreciated by enough people to make it profitable. People buy krap like nissans, hondas and toyotas while a good, serious car company is going down the tubes.
        hq129x
        • 3 Years Ago
        @carfan
        Gee I guess the 250k trouble free on my '90 Camry means nothing huh?
        Marquise
        • 3 Years Ago
        @carfan
        They were good cars until exactly what your saying happened. They did not do enough advertising in my opinion to stay afloat, i have not seen one ad in years.
      hq129x
      • 3 Years Ago
      Oh, just another sob story.....
      mospoint05
      • 3 Years Ago
      Saab is not a real car.
    • Load More Comments