Saab faces scrap heap as court set to rule on future
Greg Roumeliotis and Anna Ringstrom
October 21,2011 Reuters
(Reuters) - Saab moved closer to collapse on Friday as its owner rejected the latest rescue proposal from Chinese investors and its court-appointed administrator said the Swedish carmaker lacked the cash to carry on.
Saab has lurched from one crisis to another since early this year and has not produced a car for months. It was given creditor protection in September -- for the second time in around two years -- owing hundreds of millions of crowns to workers and suppliers.
Salvation was meant to come from investments by Chinese auto firms Zhejiang Youngman Lotus Automobile Co and Pangda Automobile Trade Co (601258.SS), but with this money uncertain to be paid on time or in full, the administrator on Friday asked a court to pull the plug on a reconstruction.
If the court agrees, Saab will almost certainly be declared bankrupt.
"There is no time to find any other solutions, given the company's economic situation," administrator Guy Lofalk said in a letter to the court. "In the current situation, the company is not in a suitable position for reconstruction to continue."
Lofalk's opinion came just hours after an investment firm headed by racing car aficionado Alex Mascioli pledged new cash for Saab, though he conceded his investment was far from enough to tide Saab over until Chinese cash arrives.
Saab has said it will contest Lofalk's request and would try to have him replaced as administrator.
23-10-2011, 12:39 PM
Saab Faces Scrap Heap as Court considers Fate
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