Saab owners NEVS denied creditor protection by Swedish courtThu, 28 Aug 2014 15:45:00 EST
The story of Saab is practically a Greek tragedy at this point. The quirky Swedish automaker that was once known as a pioneer of affordable turbocharging has been followed by years of news that just seemed to keep getting worse. At this point, maybe the brand name should be allowed to fade away into the ether and be remembered for the good times that it gave us.
Saab's latest predicament is that its parent National Electric Vehicle Sweden (or NEVS) has been denied protection from its creditors by the Swedish courts. According to Reuters, the judges called the business' financing plan "vague and completely undocumented." A company spokesperson told Reuters that it plans to appeal.
Seemingly in reaction to the court's decision, NEVS posted a press release on its website announcing that the company had applied "for a reorganization to create more time for the ongoing negotiations." The automaker continues to claim that it's negotiating with two global automakers to sell a portion of the company, possibly Mahindra, but the process is taking longer than it originally predicted. It seems a distinct possibility that this reorganization attempt is simply a way to buy extra time.
With no protection, the Enforcement Authority in Sweden could force NEVS to sell property to pay creditors, of which it allegedly has over 90. It said in the statement, "loss of such assets could obstruct finalizing a contract," with the automakers it's negotiating with and dash even the scant hopes the business has of being saved. Scroll down to read the beleaguered company's full release.
To create more time for negotiations Nevs applies for reorganization
The Board of Directors of National Electric Vehicle Sweden AB has today, August 28, 2014, decided to apply for a reorganization to create more time for the ongoing negotiations. The application has been submitted to the district court in Vänersborg, Sweden.
"The tripartite negotiations we have with two global vehicle manufacturers are still progressing, but are complex and have taken more time than we predicted. We need additional time to complete the negotiations and reach an agreement. Therefore, we apply for a reorganization. We intend to fully pay our debts to our suppliers", said Nevs' President Mattias Bergman.
Nevs has about 400 suppliers of direct materials and 500 suppliers of indirect materials. The vast majority of these have chosen to await the outcome of the ongoing negotiations. Some creditors have filed applications for an order to pay at the Swedish Enforcement Authority.
The upcoming activities from the Enforcement Authority may involve mandatory sale of assets that are supposed to be included in Nevs' agreement with above mentioned vehicle manufacturers. Loss of such assets could obstruct finalizing a contract with them. To get more time to complete the negotiations, Nevs filed for a reorganization today.
Nevs proposed Mr. Lars Eric Gustafsson, Attorney at Hamilton law firm in Stockholm, as administrator during the reorganization period.
By Chris Bruce
See also: Saab's latest Chinese owners facing their own credit woes, GM SUV window switch recall urges owners to park vehicles outside, GM recalling 8.4M cars, 8.2M related to ignition problems.