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article imageSaab down to last gasp, China may throw lifeline

By Martin Laine     Sep 10, 2011 in Business
A Swedish court this week rejected automaker Saab’s request for protection from creditors, and the company has not yet been able to meet its August payroll, but a glimmer of hope comes from a Chinese carmaker thinking about investing in the iconic brand
Reuters is reporting that Zhejiang Youngman Lotus Automobile is actively considering investing in the Swedish company that has been struggling for years – first as a subsidiary of Ford Motor Company and more recently since it was purchased last year by Dutch luxury carmaker Spyker.
The potential investors need the approval of the Chinese government before going ahead and pouring in a reported 245 million euros into the company.
“We have ongoing contact with NDRC (National Development and Reform Commission) in Beijing,” said Rachel Pang of Youngman Lotus.”We are getting positive signals. I have a good feeling about this.”
Meanwhile, there is some confusion whether or not the company has the money to pay salaries or not.
On Friday, Saab CEO Victor Muller first claimed that there was money to pay salaries but that it couldn’t be paid because of debts to creditors. But responding to questions, Muller refused to disclose where the money was, other than to say it was in a bank account.
“We could have paid the wages, and we can,” Muller said in today's edition of The Local.This raised a controversy over why these assets weren’t listed in the court filing for protection. Muller later tried to clarify his statement by saying the money was not within the Saab organization.
On Wednesday, the company filed for protection from creditors so that it could reorganize, but the court rejected the request on Thursday stating it did not believe reorganization would succeed. Muller said the company will appeal the court's rejection. If the rejection is updeld, it would leave the company no alternative but to file for bankruptcy. Under Swedish law, workers would be guaranteed their wages.
The company has been unable to pay suppliers, and has had difficulty meeting its payroll. Production was halted in June and has not resumed.
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