GM ’cannot support’ plans to save Saab
Sunday, December 18, 2011
STOCKHOLM (AP) — Bankruptcy proceedings remain on the cards for troubled Swedish car maker Saab after former owner General Motors Corp. said Saturday that proposals presented so far to salvage the troubled brand are unacceptable and won’t be supported.
Trollhattan-based Saab, bought by Dutch group Swedish Automobile NV in 2010, faces a court-hearing Monday to determine whether it will exit bankruptcy protection.
That means that if Saab doesn’t present a viable survival plan, bankruptcy proceedings are likely to start.
Due to its ailing finances, Saab’s production has been idle for months and it has struggled to pay both suppliers and its 3,700 staff.
Earlier this year, Chinese companies Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. said they would buy the brand for (euro) 100 million ($135 million), but the deal was blocked by GM amid concerns over the technology licenses and production contracts it has with Saab. Since then, the brand has worked on other, alternative solutions.
In an email to The Associated Press Saturday, GM spokesman Jim Cain said proposals presented so far are “not meaningfully different from what was originally proposed to General Motors and rejected.”
In contrast to what Swedish Automobile’s CEO Victor Muller has claimed, Cain added that GM’s consent is required for Saab to move forward. A consent he said would be unlikely.
“Each proposal results either directly or indirectly in the transfer of control and, or ownership of the company in a manner that would be detrimental to GM and its shareholders,” he wrote. “As such, GM cannot support any of these proposed alternatives.”
Saab did not return calls seeking comment Saturday, but Muller told Swedish daily Svenska Dagbladet that GM “has no say about a plan that means that Youngman would receive zero percent of the shares in Saab.”
Further, he said that GM’s statement was “obviously” based on rumors, trying to “influence Monday’s court-hearing in a negative way.”
Saab entered bankruptcy protection in September after a court gave it three months to reorganize and solve a severe liquidity crisis.
Earlier this month, however, the automaker’s court-appointed administrator applied for the process to end because he said there wasn’t enough bridge-financing to cover the costs during the reorganization and that there wasn’t enough time to find a financing solution that GM would accept.
He added that GM’s categorical rejections have made a near-term solution impossible, even though he considers that Saab, and its owner, have stayed within the framework of the demands set out in the existing contracts with GM.