A Swedish court on Sept. 8 rejected an application by ailing carmaker Saab for protection from creditors to give it breathing space to solve a cash crisis and get funds from Chinese investors, Automotive News Europe reported.
The Vanersborg district court in western Sweden said in a statement on its website that there was no reason to believe a new creditor protection process, known as a reconstruction, would work. Saab went through the process in 2009-2010 when it was owned by General Motors Co.
Saab, the 64-year-old Swedish carmaker that halted production in June, had applied for court protection from creditors in a bid to raise money to restart operations and avoid a bankruptcy petition by unions, Bloomberg’s news reported.
“The reorganization is a move to stabilize the company in this tremendously rocky period,” CEO Victor Muller said Sept. 5 at the firm’s headquarters in Trollhaettan, Sweden.
The carmaker had sought a court-administered, voluntary restructuring for the second time in as many years after previous owner General Motors began liquidating Saab Auto at the beginning of 2009. GM eventually sold Saab to Spyker Cars NV in February 2010 for about $400 million cash and shares.
“Saab’s owners had been trying to raise short-term financing to keep the brand afloat until it secures Chinese government approval for [$245 million] with two companies, Pang Da Automobile Trade Co and Zhejiang Youngman Lotus Automobile, to distribute and build its cars in China,” wrote John Reed of the Financial Times.
The carmaker’s CEO, Victor Muller, had said he was confident Saab would get Chinese approval for the loans, though some analysts are doubtful China will OK them.