A Swedish court gave struggling carmaker Saab leave to appeal a lower court’s decision denying it protection from creditors, offering a glimmer of hope for the bankruptcy-threatened company on Monday.
Saab, owing August wages to workers and €150-million ($207-million U.S.) to suppliers, applied for protection from creditors this month, but was turned down. Owned by Netherlands-listed Swedish Automobile, the company asked for leave to have the case re-examined, pointing to, among other things, a promise of new funding it received early last week.
The court did not give any further information on its decision, but said a ruling on whether or not to grant Saab protection from creditors could come as soon as Wednesday.
“It is only when we decide on whether to allow a [company]reconstruction or not that we give a justification,” Judge Peter Islander told Reuters. “You cannot draw any conclusions on the result [of whether the court will allow Saab protection from creditors]just because we gave them leave to appeal.”
Marie Karlsson-Tuula, associate professor of civil law at Gothenburg University, said she did not think Saab would be successful in its appeal. “If the situation remains as it is, it is pretty much over,” she said. “I mean, there is not any money.”
Production at Saab has been more or less at a standstill since April when unpaid suppliers pulled the plug on deliveries.
Last week, Saab agreed to €70-million bridge financing with the help of a guarantee from car firm Zhejiang Youngman Lotus Automobile, which has agreed to take a stake in Saab.
But the money is not enough to pay workers and suppliers and get production restarted and two of Saab’s own unions and a supplier have asked the courts to declare it bankrupt.
Sweden’s debt collection agency had already begun seizing assets at the behest of unpaid suppliers. Saab has been pinning its hopes on courts giving it breathing space while it waits for Chinese authorities to approve a €245-million investment by car firms Youngman and Pangda.
“We are naturally pleased,” said Saab spokeswoman Gunilla Gustavs. “It is an important step in the right direction.”
She said Saab was working on getting further funding and on preparations for a company reconstruction. “Now we have to wait for the appeal court’s decision,” Ms. Gustavs said.