Court denies Saab bankruptcy protection

A Swedish district court today has rejected Saab's proposal for voluntary reorganisation.

The company had filed for bankruptcy protection yesterday as it struggles to find short-term funding.

Saab has had problems paying staff and suppliers over the past few months and has not made cars at its factory since June.

It had signed a joint-venture deal with Chinese car firms Pang Da and Zhejiang Youngman Lotus Automobile in July and hoped that this would secure its long-term future.

However, that deal has still to be approved by the Chinese and Swedish governments and Saab's owners filed for bankruptcy protection in order to secure short-term funding pending the deal.

Saab Automobiles CEO Victor Muller said that he was surprised and disappointed by the decision. He thought Saab had satisfied what was believed to be the burden of proof to have a reorganisation application approved. Saab will appeal the court decision.

Yesterday, Saab GB said it was independent from Saab Automobiles and the UK operation 'has enough funding in place to meet all its creditor obligations and will continue to pay all its employees, dealers and suppliers as normal'.

'Saab GB and its dealer network will continue to provide servicing, replacement parts and vehicle warranty facilities for Saab customers as normal,' said a spokesman.