Sunday 21 January 2018

'Last nail in coffin' as Saab is declared bankrupt

Saab president and chairman Victor Muller addresses a news conference yesterday in Trollhattan, Sweden, as the company filed for bankruptcy with a Swedish court. Photo: AP
Saab president and chairman Victor Muller addresses a news conference yesterday in Trollhattan, Sweden, as the company filed for bankruptcy with a Swedish court. Photo: AP

Johan Ahlander

Famed Swedish car maker Saab was declared bankrupt by a court yesterday, ending a nine-month survival battle by its Dutch owner.

Saab, which has made cars for 64 years, has suffered cash problems since March after 2010 sales fell short of target amid the disruption of its sale by General Motors.

It has not made any vehicles since April and several rescue attempts have failed.

Saab owner Swedish Automobile said former owner and key licence-holder General Motors had blocked a last-ditch rescue plan by Chinese investor Youngman.

It also criticised the court-appointed administrator who had been overseeing its creditor protection process and who, it said, had meddled in the deals.

Saab proposed a new rescue involving Zhejiang Youngman Lotus Automobile, but that was rejected by GM at the weekend.

"That, basically, was the last nail in the coffin of this beautiful company," Swedish Automobile chief executive Victor Muller said hours after handing in a request to a Swedish court to have Saab made bankrupt.

The court later approved the request and appointed two receivers to run the company. Swedish Automobile shares, which had been suspended, fell 61pc to €0.08.

GM, Saab's former owner, still licenses key technology to it on which the building of Saab cars depends, and has a small shareholding.

Analysts said GM had probably been seeking to protect its Chinese co-operation with state-run SAIC Motor Corp Ltd (Shanghai Automotive).

"I think what they are concerned about is that the technology licensed by Saab will go back on the Chinese market and compete with their -- basically same technology -- in the joint venture with Shanghai Automotive," Mr Muller said.

GM spokesman James Cain said the US group had been open all along with Saab, and had helped over "many months".

"We couldn't support the proposals and we have been very consistent, very clear and very honest, because we felt that was important for Saab and their prospective partners," he added.

Mr Muller reserved his worst vitriol for the administrator, Swedish lawyer Guy Lofalk, who had been overseeing Saab's protection from creditors, which it entered in September.

"I have a lot of irritations but my irritation for Mr Lofalk is higher than that for GM. . . I can't see the reasoning Mr Lofalk had when he started to unravel my deal, other than that he, at whatever price, wanted to change ownership," Mr Muller said.

Mr Lofalk has said he informed Saab all along of what he was doing.

The company employs around 3,500 people. (Reuters)

The Saab dealer network in Ireland will continue to provide parts and servicing, a spokesman for the distributors told the Irish Independent.

Saab Parts is a separate company and is not involved in the current proceedings.

Irish Independent

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