Sweden’s Saab files for bankruptcy

Two Chinese car companies are reportedly waiting for approval to take a combined majority stake in Saab [AFP]

The owner of carmaker Saab has filed for bankruptcy protection in an attempt to save a brand crippled by production stoppages, withheld salary payments and mounting debt.

Swedish Automobile, formerly known as Spyker Cars, said on Wednesday that Saab and its subsidiaries Powertrain and Tools were included in the application for a voluntary and “self-managed” reorganisation filed at a local court in southwestern Sweden.

Saab has struggled for several months while it pursues funding from an assortment of Chinese and other investors.

Production at its Swedish plant has been at an almost continuous standstill since April as suppliers refused to
provide parts until they received payment. The company also failed to pay salaries in August.

‘Voluntary reorganisation’

In June, Saab said two Chinese car companies, Pangda Automobile Trade Co Ltd and Zhejiang Youngman Lotus Automobil, had agreed to take a combined majority stake in the firm aimed at rescuing the struggling  carmaker.

The deals are still awaiting approval from the Chinese authorities.

But the Chinese authorities have halted planned investments in the past, such as Saab’s failed deal with Hawtai Motor Group in May and Sichuan Tengzhong Heavy Industrial machinery’s bid for GM’s Hummer, which collapsed in 2010.

Swedish newspaper Dagens Industri said late on Tuesday that Youngman would not get the necessary Chinese official approval to take part in the deal, citing several sources.

Instead, state-owned Beijing Automotive Industry Holdings Co or sport utility vehicle maker Great Wall Motor, were seen by Chinese officials as being more suitable partners, the newspaper said.