By Mícheál Leydon

Despite some close calls and last minute swerves, the Swedish Car Manufacturer Saab has continued to keep the show on the road.

Control Failure
In early September, the Vanersborg District Court rejected the troubled Swedish car manufacturers' application for voluntary reorganisation and placed Saab in a further precarious position with several creditors lining up bankruptcy actions.

Successful Manoeuvring
Saab quickly raised an appeal in the Court of Appeal in Gothenburg and subsequently had its application for voluntary reorganisation and bankruptcy protection approved.

The decision meant that Saab entered a process similar to Irish Examinations and saw an independent administrator appointed to oversee the formulation of a viable business with a lower cost base.

The timelines under this process are also similar to Irish Examinations in that the process can be executed over an initial period of three months, but extended to a maximum of 12 months if necessary. Most however believe that the process was a short term measure to obtain some breathing space and cancel the bankruptcy filings brought against Saab by three Swedish unions.

Saab initially sought to enter the restructuring process while Chinese regulators examined its joint venture plans with Chinese firms, Pang Da and Youngman. Binding agreements were made on July 4 2011 but remain subject to approval by the Chinese government’s NDRC division.

The Brakes are hit
The two month delay in the approval process pushed Saab close to the kerb but the granting of the voluntary reorganisation appeared to most to be exactly what was needed while Saab awaits a decision from the Chinese government.

However, recent reports from Sweden indicate that further delays in the approval process coupled with Saab’s failure to obtain a €70m bridging loan backed by its JV partners were leaving the Administrator facing the prospect of seeking to have Saab’s court protection revoked.

With time running out, the Administrator managed to steer the Company away from the abyss when confirmation came through that a €9.5m loan was being made available. Again, the cash buys Saab further time but the firm’s future still relies on a favourable decision coming through from the NDRC which would see as much as €245m becoming available.

Skid marks?
The NDRC decision is now expected in mid November at which time, it will be known if Saab will finally hit the wall. Until then, Saab’s nervous and precarious position continues.