A Swedish court has rejected an application by ailing carmaker Saab for protection from creditors to give it breathing space to solve a cash crisis and get funds from Chinese investors. Saab says it has commitments for additional short-term funding.
The Vanersborg district court in western Sweden said in a statement on its Web site that there was no reason to believe a new creditor protection process, known as a reconstruction, would work. Saab went through the process in 2009-2010 when it was owned by General Motors Co.
The company says it is looking for short-term stability while it seeks additional equity funding. The reorganization would have been self-managed but headed by an independent administrator appointed by the court. Under Swedish law the plan must be presented to creditors within three weeks of the filing and the plan would be executed over a period of three months.