Saab Bankruptcy Hearing Set For September 26

September 16, 2011
Two white-collar labor unions have filed bankruptcy proceedings against Saab as expected, and the lower court in Vanersborg, Sweden has set a hearing date of September 26. The bankruptcy filings against Saab were a necessary step by the unions to ensure that member are eligible for the equivalent of unemployment benefits.

Union members have not been paid for the month of August, and received delayed payments for the months of June and July. The unions expect the bankruptcy process to take anywhere from three to five weeks.

Saab has received a bridge loan of some $95 million from a Chinese partner (for the rights to build the next 9-3), and the company has appealed a Swedish court’s decision denying bankruptcy protection and allowing reorganization. Unless the Chinese government approves pending deals with partners Pang Da and Youngman prior to the appeal hearing, it’s unlikely that a higher court will reverse the original court’s decision.

It’s unlikely that the Chinese government will approve either deal, particularly within the next week. While Saab has certainly proven to be resilient in the past, the future for the Swedish automaker looks bleak indeed.

[Reuters]

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