Swedish Media Coverage: Will Saab be Allowed to Continue its Restructuring?Tuesday, March 31st, 2009
Another release from Jan-Willem Vester
Manager, Saab Automobile USA Corporate Communications
FYI, insightful media coverage from Sweden. Monday, April 6 will mark the midway point in the Saab reorganization allowed under Swedish law after 6 weeks since the February 20 start — prompting media coverage such as below. If all goes according to plan, the reorganization will run until the end of May and can be extended beyond that if need be. Vänersborg is close to Trollhättan… More to come.
Will Saab be allowed to continue its restructuring, or set to a halt? On Monday it will be decided by the district court in Vänersborg – Stockholm News
By David Jonasson — March 31, 2009
The restructuring of Saab Automobile, owned by General Motors, has lasted for almost six weeks. It has been a time of setbacks and negative headlines in media. Collapsing sales figures, job cuts, reduced operating time and no government loan guarantees.
One relief is that Saab has not needed to pay the wages, since the company has been permitted the governments wage guarantee. So far has the county administrative board paid out SEK 217 million including employee benefits to the 4000 employees. That is money tax payers will lose if Saab goes bankrupt.
If the restructuring succeeds will the money be paid back. Thus the Swedish state is one of all 1300 creditors who can question the viability of Saab when the creditors’ meetings are held on Monday.
The district court decides if the plan for restructuring holds. The creditors’ meeting will be held at the session chamber of the municipal council in Vänersborg, since the interest from media and employees is believed to be massive.
Up to three judges could participate. District court judge Cecilia Tisell is one of them.
– There has to be a viable business concept. The proposal has to be persistent and realistic. The creditors’ views are important, she says to news agency TT.
According to Swedish law shall the restructuring end if the official trustee or a creditor asks for it and “the objective with the restructuring is not considered to be reached”.
If the restructuring is stopped, then Saab is left with all the debts and there ought to be few other outs than a bankruptcy.
– That does not have to be decided the same day. The district court could announce that later, says Cecilia Tisell.
The task of restructuring has been carried out by the official trustee, lawyer Guy Lofalk, in cooperation with CEO Jan Åke Jonsson. They have had the assistance of two international experts, Stephen J Taylor and Martin Brindley.
It is since earlier known that in the new business plan will Saab bring home all its production to the auto plant in Trollhättan. Costs will be reduced by cutting 750 jobs. The question is if that is enough.
There is also hope for a new owner with much money.