General Motors’ loss-making Swedish brand Saab won an extension period where it will be protected from creditors. This would give Saab until May 20 to restructure. Saab has been working to seek protection from creditors since February in efforts to survive the economic downturn and buy some time until its parent company, General Motors, cuts ties with the brand by Jan. 1, 2010.
“During the reorganization Saab plans to begin negotiations with creditors on writing down the company’s non-prioritized debts by about 75 percent,” Guy Lofalk, a court-appointed administrator said in Saab’s filing obtained by Reuters.
Lofalk said that Saab has around 20 potential buyers looking at the company with a deal expected to be announced in June. He said that Saab expects positive cash flow by 2011.
Saab needs a total of $1 billion to finance and overhaul production and launch new models. It said that it will raise $600 million from the European Investment Bank while General Motors would inject $400 million in the form of debt write-offs and production equipment.
– The Daily Auto Editor