Saab's last hope was to be taken over by Chinese company Youngman. This was initially a controversial option but as time passed, it became evident that it was the only option left.
Youngman already sent Saab almost $4.5 million last week and allowed it to closely avoid bankruptcy. It promised subsequent payments and things were begining to look up for the first time in a long while.
Over the weekend Youngman told the ailing automaker that it couldn't continue to fund it because ex-owner General Motors was relentlessly blocking any Chinese involvement in the company. This included everything from a loan to a complete takeover.
Some accuse General Motors of killing Saab, while others say that the company merely defended its own interests. Whatever the case may be, it left Saab in a bad situation: it no longer had a potential new owner, and it did not have the necessary funds to pay its debts and continue its operations.
Saab's Board of Directors met over the weekend and decided that it was in the best interest of the company, its employees and its creditors to file for bankruptcy. Three of the companies affected are Saab Automobile AB (Saab Automobile), Saab Automobile Tools AB and Saab Powertrain AB.
It is important to note that Saab itself filed for bankruptcy and that it wasn't pushed into it by its creditors. This makes the process faster and simpler, but it also means that Saab CEO Victor Muller could be personally responsible for some of Saab's financial woes.
According to Johan Sölveland, a spokesman for the court, a decision on the matter will be pronounced this afternoon. There is an extremely slim chance that the restructuring will be allowed to continue, but odds are the court will declare Saab bankrupt.
"The only reason that the district court will conclude that there is no bankruptcy is if there are strong reasons to suggest that the company is not insolvent. But it is not likely", said Sölveland.
If Saab is declared bankrupt, the court will appoint someone to oversee the process. From that point on, Saab's CEO and Board members will be entirely disconnected from the company. The bankruptcy's manager's main task will be to liquidate Saab's assets and pay back the company's creditors.
CEO Victor Muller will hold a press conference in Trollhättan at 2:45pm local time. This morning he told Swedish newspaper Trollhättans tidning that he is "devastated and furious".
What will happen to Saab and its operations if the company is declared bankrupt is up in the air. Victor Muller told Dagens industri that Saab's Trollhättan plant is "one of the best infrastructures in Europe. Hopefully, someone will make an effort to re-start operations", though it is way too early to indicate who would pick up the factory.
What is certain is that today is the end of Saab as we know it. The once-innovative automaker that helped pioneer technologies such as front-wheel drive and turbocharging has collapsed, marking a somber day for the auto industry and the legions of Saab fans worldwide.
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