Swedish Court Expected To Approve Saab Automobile Debt Plan
16 Juni 2009 - 4:55PM
Dow Jones News
A Swedish court Wednesday is expected to approve Saab Automobile
AB's proposal to slash its debt to hundreds of creditors, after
General Motors Corp. (GMGMQ) Tuesday said it had agreed to sell the
unit to Swedish supercar maker Koenigsegg Group AB for an
undisclosed sum.
Saab has proposed under the plan to settle its debts by paying
25% of around 10.5 billion Swedish kronor ($1.34 billion) owed to
more than 600 creditors, including auto suppliers and the Swedish
government. The vast majority of the debt, almost SEK10 billion, is
owed to GM.
Saab spokeswoman Gunilla Gustavs said Tuesday that GM's
tentative agreement with Koenigsegg doesn't change the outlook for
Wednesday's court case.
"Writing down the debt has always been part of the plans" to
attract a buyer for the car maker, Gustavs said.
If GM agrees to write off 75% of Saab's debt, it would mean a
reduction of around SEK7.5 billion, which would otherwise have been
assumed by the buyer.
Gustavs said Saab's proposal was likely to get the necessary
approval both of 75% of the creditors and of creditors representing
at least 75% of the total debt, as GM, which supports the plan,
holds over 90% of its debt and Saab has gained approval from over
80% of the creditors.
The Vanersborg District Court in southwestern Sweden will start
processing the case Wednesday and may reach a decision later the
same day, district court judge Cecilia Tisell told Dow Jones
Newswires Tuesday.
Saab, which entered bankruptcy protection in February, has asked
its creditors to support its proposal, arguing that they would
likely end up receiving at most 15% of what they were owed if Saab
was forced into bankruptcy.
GM itself filed for protection from its creditors earlier this
month.
Company Web site: www.saab.com
-By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099;
gustav.sandstrom@dowjones.com and Ola Kinnander, Dow Jones
Newswires; +46-8-5451-3097; ola.kinnander@dowjones.com