Saab files for bankruptcy protection

Saab,rescued from closure by General Motors Co in early 2010 by Amsterdam-listed Spyker Cars 8212; later renamed Swedish Automobile Swan 8212; has struggled for several months while it pursues funding from an assortment of Chinese and other investors.

Production at its Swedish plant has been at an almost continuous standstill since April as suppliers refused to provide parts until they received payment. The company also failed to pay salaries in August.

In June,Saab said two Chinese car companies,Pangda Automobile Trade Co Ltd and Zhejiang Youngman Lotus Automobil,had agreed to take a combined majority stake in the firm aimed at rescuing the struggling Swedish carmaker. The deals are still awaiting approval from the Chinese authorities.

The eventual purpose of the proposed voluntary reorganisation process is to secure short-term stability while sumultaneously attracting additional funding,pending the inflow of the equity contrbutions of Pang Da and Youngman,Swan said in a statement on Wednesday.

But the Chinese authorities have halted planned investments in the past,such as Saab8217;s failed deal with Hawtai Motor Group in May and Sichuan Tengzhong Heavy Industrial machinery8217;s bid for GM8217;s Hummer,which collapsed in 2010.

Swedish newspaper Dagens Industri said late on Tuesday that Youngman would not get the necessary Chinese official approval to take part in the deal,citing several sources.

Instead,state-owned Beijing Automotive Industry Holdings Co BAIC or sport utility vehicle maker Great Wall Motor,were seen by Chinese officials as being more suitable partners,the newspaper said.

A source said in May that Great Wall had been talking with Saab8217;s owner about a possible tie-up.

At this moment,there is no money and they Saab have been waiting for money for more than five months. The problem is still the same 8212; they need the money,said Theodoor Gilissen analyst Tom Muller.

ADMINISTRATOR CONTROL

Swan said that under the filing for voluntary reorganisation Saab Automobile AB and two subsidiaries were asking the Swedish court to appoint an administrator with whom management would work to reorganise the company.

Saab said it will present the reorganisation plan to creditors within three weeks of filing the reorganisation plan.

Saab entered this same process in 2009 after GM pulled its funding and it exited later that year.

According to Saab8217;s annual report,the company paid 1.9 billion crowns 290 million in wages,social contributions and pensions for 3,208 employees in 2010.

On that basis,the company had to pay out around 157 million crowns 24 million in staff costs each month last year. Saab now has around 3,640 employees.

The reorganisation plan aims to lower costs and create a viable,competitive and independent organisation,Swedish Automobile said.

Saab asked for the court-appointed administrator to be the same lawyer who handled the 2009 Saab reorganisation.

The administrator will apply for a Swedish state wage guarantee scheme to cover Saab8217;s wages,Swedish Automobile said.

Trade in Swedish Automobile8217;s shares has been suspended and the stock will be put on a watch list if Saab8217;s court request is approved,Dutch market authority AFM said in two separate statements.