Car-Makers Saab File For Bankruptcy

Swedish car-manufacturer Saab has filed for bankruptcy after failing to secure funds from potential investors.

The bankruptcy comes after Saab's previous owner General Motors (GM) said that they would stop licensing technology to the car-makers if they sold a stake to a Chinese manufacturer, who they didn't want to access the technology licence. GM stated that a deal with the Chinese manufacturers would undermine its own business.

The company said that they were left with no option but to file following the takeover talks with several Chinese companies including Zhejiang Youngman Lotus Automobile who tabled a bid of around £500m as well as the intervention from GM.

In a statement Saab's owners, swedish Autmobile said: 'After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded.

'The Board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors.'

Saab have been making cars for over 60 years, but encountered financial difficulties earlier this year, ceasing production in the main plant in Trollhattan, Sweden since April. The company are said to have struggled to pay suppliers.

The British division, Saab GB went into administration in November in an attempt to find funding, but failed to secure any.

It is said that Guy Lofalk, Saab’s court-appointed administrator had already applied to end the reorganisation earlier this month stating that the company were out of money with no realistic hope of gaining financing soon enough to ensure survival.

General motors sold Saab in 2010 to the compant now known as Swedish Automobile but remained a stakeholder and supplier. The company employed around 3500 people, mostly based in Sweden but the bankruptcy will mean the loss of jobs of around 55 people in the Milton Keynes headquarters and 65 at Saab City, a wholly owned subsidiary of Saab GB.