Following previous owner GM’s recommitment over the weekend to block any deal for the purchase of Saab, Chinese firm Youngman has finally thrown in the towel and announced that funding to continue and complete the ongoing reorganization process could not be concluded.
Saab’s parent company, Swedish Automobile, subsequently decided that the automaker without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors. The Swedish court overseeing the reorganization process has since accepted the bankruptcy application and has appointed two receivers to help sell off remaining assets and pay back creditors.
Swedish Automobile, led by Victor Muller, said it does not expect to realize any value from its shares in Saab and will write off its interest completely. It is believed that Muller personally handed in the bankruptcy application for the 64-year-old company.
As previously reported, Swedish Automobile had hoped to sell Saab to Youngman, which was willing to build up the Swedish brand into a full-line luxury automaker with new products such as an entry-level 9-1, 9-6X sports crossover and 9-7 flagship sedan. However, such a deal would involve the handover of several technology licenses owned by former parent GM, which fears they may end up in the hands of its competitors in the Chinese market.
GM has a number of preferential shares in Saab and this past weekend said it wouldn't approve any of the recently proposed new ownership structures, ending hopes of a deal to be secured before a court decision on the continuation of Saab’s reorganization process that was to be made today.
Saab, which directly employs about 3,700 staff, hasn’t built a car since April. Production originally stopped after suppliers, which make up most of Saab’s creditors, stopped delivering parts due to unpaid bills.
It’s a sad day for Saab fans all around the world but as we've seen in the past bankruptcy does not always have to mean the end of a brand--only time will tell. In the meantime, click here for our complete coverage of Saab’s woes.