Saab has just a week to come up with a rescue deal to stave off bankruptcy

THE administrator in charge of Saab’s reconstruction yesterday gave up his efforts to save the struggling car company due to a lack of funds – leaving the firm with just a week to find a rescue package or face bankruptcy.

In an application to end the struggling car company’s salvage process, court-appointed administrator Guy Lofalk said Saab’s owner, Swedish Automobile, had failed to deliver sufficient bridge-financing to cover costs during the reorganisation.

He also said there was insufficient time to find a financing solution that former owner General Motors (GM) would accept.

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Lofalk argued that this was partly because of “General Motor’s categorical ‘no’ to contributing to any proposal that has been presented to them so far, despite the fact the parties have stayed within the framework of demands in existing contracts”.

Swedish Automobile has a week to respond to the administrator’s application or Saab could be declared bankrupt. The Vanersborg District Court will deliver a verdict on 16 December.

Saab said it will continue to fight for survival, like it did earlier this year when a court gave it a few days to present an answer to a similar application by the administrator.

Saab spokeswoman Gunilla Gustavs said: “We still have five to six days to do it. We’re continuing to talk with the Chinese to reach a solution.”

Earlier this year, Chinese companies Zhejiang Youngman Lotus Automobile and Pang Da Automobile said they would buy the brand for €100 million (£85m), but that deal was blocked by GM amid concerns over its technology licences.

On Monday, Swedish Automobile said it was in fresh talks with Youngman and an unnamed Chinese bank about getting them to buy stakes to help Saab, but GM said its position on a sale had not changed.

GM spokesman Jim Cain refused to say what it would take for the US car company to change its mind and allow a sale of shares in Swedish Automobile to Chinese investors.

Gustavs said the company was studying alternative plans. She added: “There is always a plan B.”

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Saab has been fighting for survival since 2010, when GM sold the loss-making brand to Dutch company Spyker Cars, which has since changed its name to Swedish Automobile.

Production has been suspended at Saab’s main plant in Trollhattan, in the south-west of Sweden, for most of the year while the company struggled to pay suppliers and its 3,700 employees. It entered bankruptcy protection in September after a court gave it three months to reorganise and solve a severe liquidity crisis.

Saab’s employees have still not received their November salaries and two trade unions last week filed official requests for the money, which means Saab has seven days to pay or face bankruptcy proceedings.

The car-maker’s UK distribution arm went into administration last week, putting more than 100 jobs under threat.

Saab GB holds the exclusive rights to distribute the Swedish company’s cars and parts in the UK and employs 55 staff at its base in Milton Keynes.

The UK arm also owns Saab City, a subsidiary that runs a pair of dealerships in London and employs about 65 workers.

Fellow Swedish marque Volvo was sold by Ford to Geely, China’s largest privately-owned car maker, in March 2010 for $1.8 billion (£1.2bn). The then loss-making brand had been up for sale since 2008, when US car giant Ford began off-loading many of its overseas assets.