Saab’s application for bankruptcy protection has been approved by the Court of Appeal in Gothenburg. This will give Saab more time to pay its workers, and its suppliers once investment funds finally come through.
A few of weeks ago, Saab applied for bankruptcy protection after two unions asked courts to put Saab into bankruptcy after the Swedish company failed to pay a number of its workers. Saab was given time to pay but the company couldn’t come up with the funds by the deadline.
Two weeks ago, courts rejected Saab’s application for bankruptcy protection saying that it didn’t believe a reorganisation would work for Saab. Saab was waiting on promised investments from Chinese companies Pang Da and Youngman at the time (and still is), which didn’t help the situation.
The funding committed by Chinese partners Pang Da and Youngman, is still pending approval of the Chinese government, who has so far been reluctant to allow domestic companies to partner with foreign automakers (except, of course, the deal between Geely and Volvo).
The Swedish government will now pay Saab employee salaries over the reconstruction period, expected to last a minimum of three months.
