Dow Jones Newswires (Stockholm) - Two Swedish labor unions Monday submitted applications for Saab Automobile AB's bankruptcy on behalf of about 1,130 workers who haven't received their August paychecks.
Both unions, Unionen and Ledarna, pledged to withdraw their petitions if the Court of Appeal overturns a lower court ruling last week that denied Saab Automobile protection from its creditors while it restructures its operations. The cash-strapped car maker is expected to file its appeal Monday.
That means the fate of the company, which is owned by the Netherlands-based Swedish Automobile NV (SWAN.AE), rests with the courts.
"This is not a situation any of our members desires," Unionen chairman Cecilia Fahlberg said in a statement. Unionen, which represents about 1,000 workers, took the step to petition for bankruptcy to ensure its members received the compensation they were entitled to, she said.
Andreas Olsson, lawyer at union Ledarna, which represents about 130 workers, said in a statement that the situation at Saab Automobile now was untenable and that the limit for what was reasonable had been passed.
Saab Automobile spokeswoman Gunilla Gustavs told Dow Jones Newswires that Saab Automobile was doing everything it could to resolve its financial problems.
Swedish Automobile Monday announced it had signed a deal securing EUR70 million in new short-term funding from a Chinese investor. The money from Zhejiang Youngman Lotus Automobile Co. is, essentially, an advanced payment on an investment deal that still is awaiting approval from regulators in Sweden and China.
Youngman and Pang Da Automobile Trade Co. (601258.SH) this summer agreed to pay EUR245 million for stakes totaling more than 50% of the automaker.
Under the terms of the deal announced Monday, Saab Automobile signed a technology license agreement that transfers its Phoenix concept car technology to a special-purpose vehicle based in the Netherlands. Youngman has bought the technology license from the SPV and provided a guarantee for payment. Swedish Automobile said it intends to repay the bridge loan with the proceeds of the equity investments of Youngman and Pang Da.
The move may improve Saab Automobile's chances of winning its appeal. Vanersborg district court Thursday rejected Saab Automobile's request for protection from its creditors on the grounds that the company didn't have enough liquidity to continue its operations. In its ruling, the court also said it was unclear if and when the Chinese deals would be approved.
"It is, of course, a good thing that we can now be a lot more concrete when it comes to our financing," said Saab Automobile's Gustavs.
Production at Saab Automobile's Trollhattan plant has been halted since April because the company has been unable to pay for parts.
