Stockholm, Sweden, May 29: General Motors Corp.'s (NYSE: GM) Saab Automobile AG got a breather on Friday when it was granted more time by a local Swedish court to pursue the sale option and steer clear of bankruptcy. The automaker got an extension of three months to restructure its business.
Earlier in February this year, Saab was given three months to streamline its business after GM had expressed its intent to get rid of Saab as part of its own shake-up.
Three months’ extension
Saab requested the court for some more time claiming that its sales efforts were going as planned and that forcing it into bankruptcy at this point in time was unjustifiable. The automaker had, in its plea, argued that it is close to finding a new owner.
The present relief until Aug. 20 has been granted by a district court in Vanersborg. Judge Cecilia Tisell, without citing any reasons, wrote in an emailed statement, “The decision has been taken. The reorganisation will be allowed to continue until August 20."
The procedure is pretty similar to Chapter 11 bankruptcy filing in the United States. The extension essentially entails that Saab will get protection from its creditors till the deadline of Aug. 20 expires.
Headquartered in Trollhättan, Sweden, Saab Automobile AB, better known as Saab, is currently a wholly-owned subsidiary of General Motors. The Swedish car manufacturer has, since its inception in 1947, become known for its safety features and green technology.
The automaker employs about 3,400 people in Sweden. Close to 15,000 jobs in the country are in jeopardy if the company were to disintegrate.
Last week, Saab declared that it has narrowed down the list of prospective purchasers to three "strong candidates" and that it would, in all probability, finalize the new buyer by early summer. The company did not disclose any of the potential buyers though.