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Electronics Production | September 07, 2011

Saab Automobile AB files for voluntary reorganization

Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) have filed for voluntary reorganization today with the District Court in Vänersborg (Sweden).
Considering Saab Automobile´s current limited financial resources, a voluntary reorganization will entail the best preconditions for using existing resources in the most efficient way. The eventual purpose of the proposed voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman.

The proposed voluntary reorganization will be a self-managed, legal process under Swedish law headed by an independent administrator appointed by the court who will work closely with the Saab Automobile management team. As part of the process, Saab Automobile has formulated a reorganization plan, which includes a number of aspects aimed at lowering its cost-base and creating a viable, competitive and independent organization. This reorganization plan will be presented to creditors in more detail within three weeks of the filing, although this period could be extended by the court.

Following court approval, the voluntary reorganization will be executed over an initial period of three months. If required, the reorganization period can be extended by another three months, up to a maximum of twelve months. Swan and Saab Automobile are confident that they will secure additional short-term funding for the reorganization period and are currently in negotiations with several parties about obtaining such funding. Funding for Saab Automobile to exit reorganization has been secured through binding agreements with Pang Da and Youngman as announced on July 4, which agreements are, however, subject to obtaining certain approvals.

As part of the reorganization filing, the court-appointed administrator will apply for the Swedish state´s wage guarantee scheme to allow wage payments to all Saab Automobile employees to be made. August salaries are expected to be paid within a short time frame following the court approval. With regards to outstanding debts to creditors, Saab Automobile will seek the support of its creditors for the reorganization process and is confident it will obtain this support, particularly because Saab Automobile aims at full redemption of outstanding debts.

Saab Automobile has proposed that the District Court appoints Swedish lawyer Guy Lofalk as administrator, who also was the administrator in the successful 2009 Saab Automobile reorganization. Victor Muller, CEO of Swan and CEO and Chairman of Saab Automobile, and the Saab Automobile management team will cooperate closely with the administrator to execute the reorganization plan. The voluntary reorganization process will cover Saab Automobile AB, Saab Automobile Powertrain AB and Saab Tools AB. All other entities, including Saab Parts AB and all overseas entities such as Saab Great Britain and Saab Cars North America, are excluded from the reorganization.

The reorganization plan contains a blueprint of how Saab Automobile´s Management expects to improve Saab Automobile´s business model with an emphasis on an independent, lean and competitive organization. Many key elements of Saab Automobile´s original business plan remain, as Management believes the objectives of the overall strategy remain intact. Through the roll-out of a fully rejuvenated product portfolio, partnerships with Chinese firms Pang Da and Youngman that will ensure access to the world´s largest and fastest growing market, and a strong and global brand, Saab Automobile is well-positioned to realize its objective of becoming a viable independent premium car manufacturer.

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