Manufacturing News

Saab heads for scrapyard as China rescue fails

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

Saab, which has made cars for 64 years, has suffered cash flow 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 license holder GM had blocked a last-ditch rescue plan by Chinese investor Zhejiang Youngman Lotus Automobile.

"After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded," Saab's Dutch owner, Swedish Automobile, said in a statement.

"The Board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors."

The court approved the company's bankruptcy request filed earlier Monday and appointed two receivers to run the company.

Swedish Automobile "does not expect to realize any value from its shares," the company added.

In receivers' hands

Saab is still attractive for some investors, Swedish Automobile said.

"There are parties out there that have expressed an interest to pursue a possible acquisition of Saab from bankruptcy," Swedish Automobile CEO Victor Muller told a news conference. He said it was now up to receivers appointed to oversee the bankruptcy process to judge such offers.

He said GM had been a problem in finalizing a rescue plan, though its unhelpful attitude had only emerged from the middle of the year. He said a court-appointed lawyer who had overseen Saab's creditor protection process had undermined rescue efforts.

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