Friday the likely do or die day for Saab
|Rick Kranz is product editor for Automotive News.|
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Circle Friday on the calendar -- that's the day Saab's fate is likely to be determined.
The ups and downs of Saab's attempt to go it alone since its independence from General Motors in February 2010 could end in bankruptcy or -- hopefully, for its employees, suppliers and dealers -- a comprehensive plan that saves the company.
The Swedish automaker must submit a revised ownership and financial plan to a Swedish court on Thursday, Dec. 15. The following day, the Swedish court is expected to make its decision.
There are three scenarios:
The court could accept the plan submitted by Saab. Saab is desperately trying to borrow 600 million euros ($791 million at today's rate), according to a Bloomberg story last week quoting CEO Victor Muller. If a deal is reached, Muller said the funds would come from Chinese automaker Zhejiang Youngman Lotus Automobile and a Chinese bank. Mueller made it clear in his interview that the automaker "had few days" to avert bankruptcy.
The court could issue an extension for reorganization. However, earlier this month, Guy Lofalk, administrator of the reorganization, requested that the voluntary reorganization process be stopped. Saab has requested that Lofalk be replaced.
Finally, the court could reject Saab's reorganization plan and authorize the equivalent of liquidation. Back on Sept. 21, the court granted Saab protection from its creditors, halting bankruptcy petitions.
Late last week, Saab said "good progress is being made, and parties are fairly optimistic that an agreement can be reached that will be beneficial for all stakeholders."
We've heard this optimistic tone before and then watched deals collapse.
Hopefully for all, this time the optimism leads to a real deal that secures Saab's future.