Saab to Continue to Have Protection From Creditors, Says Court-Appointed Lawyer Overseeing Reconstruction
Swedish automaker Saab continues to enjoy protection from its creditors, pursuant to the court-appointed attorney charged with its corporate reconstruction. This announcement from the reconstruction counsel was made just after General Motors rejected a bid from Chinese investors for the financially troubled company. Apparently, the proposed reconstruction plan for Saab had to gain approval from General Motors because the large American automaker owns preference shares in Saab and supplies critical components to the Swedish automaker. However, in response to word of a potential Chinese purchase bid, General Motors announced that it would cut off all supply of components and technology to Saab entirely if two particular Chinese investor entities were successful in acquiring Saab. Unquestionably, General Motors staunchly opposed the potential sale of Saab to the Chinese.
Saab's Financial Peril and What Lies Ahead
Where does that leave Saab? The very financial survival and wherewithal of the company is in peril. Proof of that delicate fiscal status is found in the fact that Saab has been protected from its creditors by the court since September 2011.
According to Guy Lofalk, the court-appointed administrator for Saab's reconstruction, the automaker is attempting to clarify what General Motors' position means and if there is any plausible room for negotiation and forward progression. Lofalk has the authority to seek court approval to end Saab's bankruptcy protection at any time. For now, Saab's reconstruction means that Lofalk must work with the company to chart a course for its future, in conjunction with the approval of its creditors. The main creditors of the auto manufacturer at this point are the suppliers of its parts, components, technology, and the like, who are now owed approximately 150 million euros.
What Role Does a Chinese Bid to Acquire Saab Play in the Company's Future?
Many believe the pivotal key to Saab's financial future lies with a successful acquisition bid from the Chinese. According to Lofalk, Saab's owner, Swedish Automobile, was in discussions with Chinese investors, Pang Da Automobile Trade Company and Zhejiang Youngman Lotus Automobile, concerning acquisition bids. General Motors' opposition to a Chinese acquisition bid complicates matters, however. Now, Mr. Lofalk is cautious not to pursue too many competing and alternative plans, so as to confuse and dilute the focus of future efforts. Instead, the administrator of Saab's reconstruction is focusing on that process for the company, notwithstanding the challenges that arise along the way.
For more information on Saab's reconstruction, interested parties should contact the court-appointed administrator, Guy Lofalk. Additionally, if you have a claim, concern, or inquiry involving Saab, it may be prudent to contact a bankruptcy or creditors' rights attorney for more information on options, rights, and remedies.