Troubled Saab files in court for bankruptcy protection

Ailing Swedish car maker Saab sought breathing space from creditors yesterday, filing with a local court for bankruptcy protection while it continues to wait for promised new investments from two Chinese firms. “Obviously a restructuring is preferable to bankruptcy. But receivership is still a step closer to bankruptcy.

“We’ve always warned investors it was extremely risky,” said Jan Maarten Slagter, director of the Dutch shareholders’ association, VEB. Saab, rescued from closure by General Motors in early 2010 by Amsterdam-listed Spyker Cars – which was later renamed Swedish Automobile (Swan) – 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 because 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 and Zhejiang Youngman Lotus Automobil, had agreed to take a combined majority stake in the firm for a total of £215m.

The deals are still awaiting approval from Chinese authorities.