Saab Likely To File For Bankruptcy

By
08/31/2011 08:20 AM ET

The Swedish automaker Saab is likely to file for bankruptcy again after seeking court-order protection from creditors, but no timetable for the filing was given.

The Saab production line essentially has been shut down since late April, when still-unpaid suppliers stopped providing parts. The automaker said it has made deals with some creditors so that production can resume. It also has signed agreements with Chinese companies to get more cash.

Saab has officially declined to comment on the report, saying that it continues to work on raising the funds necessary to restart production. The only statement given was the car manufacturer has reached agreements with the majority of its component suppliers. However, recent reports say the company may miss or delay payroll for its employees.

Saab was originally a division of Svenska Aeroplan Aktiebolaget, which had been created in 1937 in Linkoping. The company had been established in 1937 for the express purpose of building aircraft for the Swedish Air Force to protect the country’s neutrality as Europe moved closer to war. As the war drew towards a close and the market for fighter planes evaporated, the company began looking for new markets in which to diversify.

Saab Automobile was acquired by General Motors in 1990 who sold it to Spyker Cars N.V. (now Swedish Automobile) in 2010 after rumors of bankruptcy was looming.

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