The court-appointed administrator overseeing the reorganization of Saab Automobile has applied to end the reorganization process. That would leave Saab open to petitions from its creditors, and would likely result in the company being declared bankrupt. The move came just hours after Saab announced it had received a $60 million bridge loan.
Saab today announced it had received a $60 million investment from Connecticut-based North Street Capital. The automaker said it agreed to accept the deal — which would result in North Street receiving a sizeable number of Saab shares — because it “has doubts” that Chinese companies Youngman and Pang Da will complete payment of their bridge loans on time.
Nevertheless, Guy Lofalk, the administrator appointed by a Swedish court, has applied for the reorganization process to be terminated. The original agreement held that Saab would have to present a restructuring plan to investors on October 31. It’s unclear why Lofalk wants to end the procedure prematurely.
North Street is no stranger to Swedish car companies: in September, the private-equity firm purchased Spyker from Swedish Automobile for $44 million. Saab CEO Victor Muller will continue to serve as Spyker’s CEO.
Saab Automobile said in a statement that it would appeal the decision and petition the court to allow for a continuation of the restructuring process. The company also plans to petition the Swedish court to replace Lofalk as the administrator of the reorganization. Lofalk was involved in Saab’s previous restructuring effort in 2009.
Sources: Saab, The Wall Street Journal