Saab Auto may get more time to reorganize

General Motors Corp.'s unprofitable Saab Automobile unit is likely to win a three-month extension to reorganize if it asks for the extra time when submitting a business plan this week, the judge overseeing the process said.

"Let me put it this way, it doesn't take much" to allow a company a longer period to work out rescue agreements, Cecilia Tisell, a bankruptcy judge at Vaenersborg District Court in southern Sweden, said in a telephone interview. "As long as we find that Saab's reorganization has any chance of success, we will approve the application to extend."

Saab received protection from creditors in February after Detroit-based GM said it's cutting ties to the division as part of a Europewide reorganization. Guy Lofalk, the court-appointed lawyer overseeing Saab's reorganization, must file an outline of the unit's future by May 20 at the court, whose district includes the division's headquarters city of Trollhaettan.

"If nothing happens by that date, the reorganization has failed and will be terminated," Tisell said. "But Guy Lofalk told the court on April 19 that he will request an extension, so I assume that he will."

Saab aims to submit its application on May 19, beating the deadline by a day, said Gunilla Gustavs, a company spokeswoman.

Three Possible Bidders

Lofalk was cited by Swedish news agency TT a week ago as saying Saab only has two or three bidders remaining, out of an initial 30 that the division said had shown some interest, and the shortlisted suitors have signed letters of intent. Lofalk, who is based in Stockholm, didn't return phone calls today seeking comment.

Fiat SpA, Italy's biggest carmaker, said on May 6 that it may be interested in buying Saab, partly because of its U.S. sales network of about 220 dealers. Turin-based Fiat is also considering bidding for GM's Opel division in Germany and Vauxhall unit in the U.K. in a separate process.

Hangzhou, China-based Geely Automobile Holdings Ltd., the Asian country's biggest privately owned carmaker, and an unidentified German commercial bank also remain in the bidding for Saab, Swedish newspaper GT reported on May 12, citing unidentified GM officials.

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