On Saab restructuring….

Saab are rumoured to be meeting on Friday and filing for a procedure referred to as “recontruction” or reorganisation.
David B asked the following in comments:

If I may be so stupid to ask: what does it actually mean for Saab if it goes into “reconstruction/reorganisation/bankruptcy”? This terms seems to me to be the end, but from what I’m reading it’s not…?

I covered one line of thought about this yesterday, but there’s been another article from the BBC which I think explains it quite well.

The reorganisation process is the Swedish equivalent of going into Chapter 11 bankruptcy in the US.
The company applies to the district court for a reorganisation ruling.
If it is granted, an administrator is appointed, but the current management continues to run the company.
The administrator helps negotiations with the company’s creditors to decide how much of their money they will receive.
The reorganisation lasts three months and may be renewed by the court, up to a maximum of one year.
During that period, the company is not allowed to pay off any debts that were accumulated before the reorganisation was declared.

It’s not the end of the road yet.
The news out of Sweden in the last 12 hours hasn’t been encouraging, but I’d encourage a little patience and waiting for Saab have to say about what they’re doing, rather than just the speculative stuff that’s firing in all directions.
A friend in Trollhattan wrote to me earlier this week saying It ain’t over until the fat lady sings, and there ain’t many fat ladies in Sweden!

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