Saab Automobile Files For Bankruptcy
Parent company Swedish Automobile N.V. (Swan) had been in talks to sell 100% of its shares in Saab to investors Pang Da Automobile Trade Company (Pang Da) and Zhejiang Youngman Lotus Automobile Co. Ltd (Youngman), with a short-term aim of settling debts, restarting production and restructuring the troubled carmaker.
But the deal was damaged when former Saab owner General Motors, which was still providing parts to its former subsidiary, said it would stop supplying technology if the carmaker sold to a competitor in the emerging Chinese market.
As a result, Youngman said it would not conclude the 600m Euro (£504m) deal to support the carmaker through the planned restructuring process that was expected to return Saab to profit in 2014. The Board of Saab Automobile decided that, without this funding, the carmaker and its subsidiaries Saab Automobile Tools AB and Saab Powertrain AB were insolvent and bankruptcy was in the best interests for its creditors.
The District Corut in Vänersborg, Sweden is expected to approve the filing and appoint receivers for Saab Automobile shortly. Swan expects no return on its shares, and will write off its interest in the carmaker completely.