The Swedish car-makers Saab have confirmed that they are to ask a court for legal protection from creditors while they re-structure the loss-making business.
The managing director said they had explored all available options for new funding, or even selling the company, and decided that a formal reorganisation was the best way forward. Reorganisation is a legal process which is an alternative to bankruptcy, but it could still involve job losses. Production will continue though. The idea is to give the company time to re-build, safe in the knowledge that creditors cannot force it into liquidation. But first, they have to agree formally that reorganisation would be better for them than bankruptcy. Saab posted a loss of nearly 200 million euros in 2007. The owners in the United States, General Motors, envisage Saab as an independent company, and off their hands, by the beginning of next year. GM is having to restructure too, saddled with a mountain of debt. They have offered a 320-million euro cash injection if the Swedish government guarantees much larger loans to get Saab on its feet again. Many analysts think it will take much more than that to dig the Swedes out of trouble.