F&I Management & Training

The carmaker Saab's application for protection from its creditors to help it avoid being pushed into bankruptcy has been rejected by a Swedish court.

In response, Swedish trade unions said they could demand that Saab be declared bankrupt within days.

Saab had applied for protection while trying to secure additional funding.

Saab had to suspend production in April when its suppliers stopped deliveries after not being paid. Its workers have also had their pay delayed.

Vanersborg district court rejected Saab's application because it did not believe it would work.

Blue-collar union IF Metall's leader, Stefan Lofven, said: "We will now thoroughly analyse the new situation. If the company doesn't find another solution or file a bankruptcy request themselves, we may be forced to do that in the next few days."

White-collar union Unionen's chief lawyer, Martin Wastfelt, said it might make a similar decision imminently.

"It's all about minimising the risks to secure our members' money," he said.

On Wednesday, Victor Muller, chief executive of Saab's owner, Swedish Automobile, said Saab's suppliers were owed some 150m euros ($210m; £131m).

Swedish Automobile, formerly called Spyker, bought Saab from US giant General Motors in January 2010.

Before the summer, Swedish Automobile announced that two Chinese firms would buy minority stakes in the company.

However, these deals have not yet had regulatory approval in either Sweden or China.

They also need to be approved by the European Investment Bank (EIB).

Under the agreements, Zhejiang Youngman Lotus Automobile plans to pay 136m euros for a 29.9% stake, while Pang Da Automobile will pay 109m euros for 24%.

But the Chinese government is unlikely to give the two companies the go-ahead, according to car analyst Jay Nagley of Red Spy Automotive.

"The Chinese government is concerned that its car industry is too fragmented," he said.

"It wants to see fewer, larger firms that can compete on the international stage. It doesn't want to see ambitious companies like these two buying a very small Swedish manufacturer."

Jonas Froberg, car correspondent at Swedish newspaper Svenska Dagbladet, said: "People in Sweden love Saab, and they hope it will continue. But many are pessimistic, and have become more so over the summer."

DATED: 08.09.11

FEED: BBC