The news we did not want to hear has arrived: historic Swedish carmaker Saab has filed for bankruptcy this morning at the court of Vänersborg, Sweden.

Swedish Automobile CEO Victor Muller filed for bankruptcy of Saab along with its Saab Powertrain subsidiary today, following GM’s refusal to support a new plan of investment and loan that prompted Chinese firm Youngman to announce that the funds to continue and complete the ongoing reorganization of the historic Swedish carmaker could not be carried out. Apparently, GM (which owns part of Saab) did not want did not want Saab’s Chinese partners to access its technology licenses, obstructing the final desperate efforts to save the brand.

Swedish Automobile, the Dutch company that controls Saab, decided that without further funding the company is bound to become insolvent and therefore filing bankruptcy would be the right thing to do in the best interests of its creditors. It is expected that the Swedish court overseeing the reorganization process will approve of the filing and appoint receivers for Saab pretty quickly. Last week the Dutch financial market regulator halted trading in Saab shares, while Swedish Automobile said it does not expect to realize any value from its shares in Saab and will write off its interest completely.

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Historic Swedish carmaker Saab has been bought by Chinese companies Pang Da and Youngman for 100 million Euros. Swedish Automobile main man Victor Muller finally agreed to sell Saab Automobile and Saab Great Britain outright to his former Chinese partners, a move that basically saves the brand from immediate bankruptcy. In fact, as previously reported, Saab were due in court today to put their case in front of a Swedish Court after the administrator of their court protection applied for its end.

Pang Da and Youngman, two of China’s biggest name in the business, had first offered to purchase Saab a few weeks ago, claiming that their original partnership agreement signed in July to buy a share of Saab was no longer valid because of changed circumstances, but Swedish Automobile CEO Victor Muller refused the offer, deeming it as ‘unacceptable’. In hindsight, that might have been just a strategic skirmish.

However, the deal still needs the go-ahead from the Chinese government - which is expected to provide a definitive answer by the 15th of November - and Swedish Automobile’s own shareholders.

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Dutch company Swedish Automobile, owner of Saab, has abruptly ended the partnership agreement with China’s Pang Da and Youngman groups adducing a breach of contract from the Chinese side as the reason for the break-up. The decision is a big blow to Saab’s struggle for existence, which was strictly dependent on the success of this partnership, signed last July. Initially Youngman and Pang Da were supposed to acquire a combined 53.9 % stake in Swedish Automobile for 245 million Euros, the money required to keep Saab in the business, but then the Chinese companies said circumstances have changed and now they want to purchase shares in Saab itself, in the view of a possible a takeover of the historic Swedish automaker.

Swedish Automobile CEO Victor Muller described the offer as “unacceptable” as it would activate a change of control clause that would possibly mean the end of Saab. Swedish Automobile has struggled for months seeking investors and selling off various assets in a bid to keep their Saab plant in Sweden alive, but the failure of this agreement has really put the future of the brand in jeopardy: the attorney in charge of Saab’s reorganization has just asked a Swedish court to end bankruptcy protection for the automaker, saying Saab does not have enough money to continue the process. A decision on this application will be taken on Oct. 28. However, in spite of all that, talks between Swedish Automobile and the aforementioned Chinese groups are still ongoing.

via | AutoMotiveNews

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