F&I Management & Training

STOCKHOLM -- The administrator in charge of Saab's reorganization said he had sent an application to a Swedish court to end the process because there was not enough cash to save the carmaker.

"The money is not enough to continue the reorganization," Guy Lofalk told Reuters on Thursday. "Now, an application (to terminate the reorganization) has been mailed. It should be on the court's desk tomorrow."

Lofalk said $70 million promised by U.S. private equity company North Street Capital on Thursday for Saab was far from enough to continue reorganization.

He said Chinese investors Zhejiang Youngman Lotus Automobile Co and Pangda Automobile Trade Co. are keen to buy Saab but have failed to reach an agreement with Saab's current owners.

Saab owner Swedish Automobile said it will contest the application and request for continuation of the voluntary reorganization process. The company will apply at the court for the replacement of Lofalk as administrator, it said in a statement.

Lofalk said he was told by authorities in China that Youngman and Pangda had the financial muscle to save Saab.

"I can just say that the parties didn't manage to reach an agreement on a sale," he said.

The Chinese companies signed a non-binding memorandum of understanding in June to take stakes in Saab for a combined 245 million euros.

Chinese authorities have yet to give a green light on the two taking ownership in Saab.

DATED: 21.10.11

FEED: ANE