Saab Goes Into Bankruptcy
Added on: Dec 20, 2011
Saab issued a press release announcing that the members of the board decided to announce the bankruptcy of the company. GM blocked the funds from Youngman and practically buried the Swedish auto constructor.
After Saab was sold when bankruptcy was knocking at the tablet, GM permanently buries the Swedish auto builder. GM is against receiving funds from Youngman and basically bankrupted Saab, without chances of being rescued.
In the press release issued by Saab it is said: " Saab Automobile, Saab Automobile Tools and Saab Powertrain filed for bankruptcy today. After receiving GM's position, who was against the transaction, Youngman informed Saab Automobile that funding will not be completed".
The same press release says: " The members of the board decided that without other funds the company becomes insolvent and the best solution is to file for bankruptcy".
In the next following period, the Court will probably approve the Saab bankruptcy. What will this cause ? Stop of production and liquidating all assets. The money obtained will be redirected to creditors and if there are any funds left they will be given to the shareholders.
Basically, Saab ends a long bankruptcy avoiding procedure. The disappointing end comes after Youngman was willing to save the company and even offered a serious cash flow The efforts were however disapproved by GM.
The reactions after the official announcement made by Saab were not late. FKG, one of the most important suppliers of Saab, thinks that the bankruptcy represents a disaster for the Swedish auto market.
Saab assents will be sold and the money will be paid to Saab creditors. The Government will have priority, as the Government authorized a 270 million euro loan for Saab.
The unions of the almost 4000 Saab workers initiated meetings with officials soon after the announcement. According to Saab union leaders, the Government will pay salaries for November and December. The average salary of a Saab employee is 25,000 Swedish crowns, approximately 2,700 EURO.
