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Time Running Out, Saab May Yet Be Forced to Liquidate

Purchase price might not cover debt.

by on Nov.14, 2011

Even if GM approves the sale of Saab the Chinese deal may not offer enough money to pay off creditors.

Already facing the possibility former owner General Motors will block its sale to a Chinese automotive consortium, fast-fading Saab may be forced into liquidation no matter what because the proposed $181 million purchase price would not cover its outstanding debts.

Saab has been frantically searching for a white knight since last March when unpaid partsmakers began a boycott that quickly shut the company’s headquarters assembly plant down.  With several proposed alternatives on hold the maker late last month announced it would sell its assets to an alliance formed by Chinese dealer network Pang Da and automaker Zhejiang Youngman Lotus.

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But there are growing doubts the deal can go through. And even if the sale wins approval from GM as well as Chinese authorities it may still be blocked by Saab’s creditors.

(more…)