Saab hangs on by a thread

Saab has shuffled back a step from the brink of extinction as a Swedish appeal court has reversed the previous court ruling and has allowed Swedish Automobile to reorganise under bankruptcy protection.

"The threat of bankruptcy is gone and our employees will be paid ... This is a good day," said company chief executive Victor Muller.

The appeals court said the lower court's finding that Saab was lacking the goodwill and brand strength needed for the reorganisation to succeed was unfounded and gave the company three months to turn itself around. Saab's Dutch parent company Swedish Automobile has however argued it only needs to keep its creditors at bay until regulatory approval goes through for its anticipated cash injection of 245 million euros ($328.7 million) from its Chinese partners Pang Da and Youngman.

The company, which says it has about 150 million euros in outstanding debt, has said it expects that cash influx in November.

Muller has repeatedly said he is "very confident" the Chinese funds would come through, and announced last week Saab had secured a 70-million-euro bridge loan deal to help it stay afloat until they did.

This announcement came just two and a half years after the carmaker last went through a large-scale restructuring to avoid bankruptcy, when it was still owned by US car giant GM and wrote down 75 per cent of its debts.

Source: Sydney Morning Herald