As a result of GM’s strategic review of the global Saab business, the Saab Board announced today that it will file for reorganization under a self-managed Swedish court process to create a fully-independent business entity that would be sustainable and suitable for investment.
The reorganization is a self-managed, Swedish legal process headed by an independent administrator appointed by the court who will work closely with the Saab management team. As part of the process, Saab will formulate its proposal for reorganization, which will include the concentration of design, engineering and manufacturing in Sweden.
This proposal will be presented to creditors within three weeks of the filing. Pending court approval, the reorganization will be executed over a three-month period and will require independent funding to succeed.
We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment. With an all new 9-5, 9-3X and 9-4X all ready for launch over the next year and a half, Saab has an excellent foundation for strong growth, assuming we can get the funding to complete engineering, tooling and manage launch costs. Reorganization will give us the time and means that help get these products to market while minimizing the liquidity impact of Saab on GM.—Jan Ake Jonsson, Managing Director for Saab Automobile
Funding for the restructured company will need to be secured during the reorganization process and will be sought from both public and private sources.
Saab will continue to operate as usual and in accordance with the formal reorganization process, with the Government providing some support during this period. The reorganization should have no impact on other GM operations.
In its updated business plan submitted to the US Congress on 17 February, GM said it had offered Saab for sale, and had requested Swedish government support prior to any sale. GM also developed a specific proposal that would have the effect of capping its financial support, with Saab’s operations effectively becoming an independent business entity 1 Jan 2010.
GM also said that is will sell or phase out the Hummer brand by 31 March, with a final resolution no later than 2010, and spin-off, sell or phase out the Saturn brand. (Earlier post.)