Saab's owner gets time to avoid bankruptcy

Carmaker Saab's parent company, the National Electric Vehicle Sweden, has been granted protection against bankruptcy as it sought extra time to source funds to pay off its suppliers and save the company from a financial collapse.

NEVS, which rescued the Saab brand from bankruptcy in 2012 and planned to produce electric vehicles, recently admitted that it did not have enough money to pay all of its 900 suppliers. However, the company stated that it was involved in "tripartite negotiations with two global vehicle manufacturers" who might invest in Saab and may ensure that all the suppliers are paid. However, they also admitted that the negotiations "are still progressing, but are complex and have taken more time than we predicted".

Most of the NEVS' suppliers have chosen to wait for the outcome of the ongoing negotiations, but some creditors have filed applications for a court order to force the company to pay them. NEVS is keen to avoid a court situation at all cost as it fears that a legal notice might jeopardise its investment negotiations with the unnamed car companies.

In order to buy more time, NEVS has applied to a Swedish district court for bankruptcy protection. There are also reports that Saab AB, the defence firm which licences the Saab name to NEVS, has withdrawn that right in light of the financial situation.

Saab has rarely been far from financial turmoil since it was offloaded by General Motors to Spyker in 2010. The latest round of financial woes come shortly after NEVS finally presented its Saab 9-3 electric vehicle. The 9-3 EV is part of a prototype series built as test beds for technical development, and to verify the manufacturing set-up in preparation its customer cars' production. NEVS had started production of the petrol-powered 9-3 Aero sedans in December 2013, but stopped it in May this year.