Saab to Appeal Court Ruling on Monday

Saab Automobile says it will submit an appeal on Sept. 12 on a Swedish court’s ruling denying its request to reorganize under bankruptcy protection.

Swedish courts denied the request yesterday, stating it is unclear how Saab Automobile and its subsidiaries, Saab Automobile Powertrain and Saab Automobile Tooling, will be able to end its liquidity crisis and continue its business.

The auto maker has delayed payments to its 3,700 employees and suppliers, some of which cut off parts shipments and have forced Saab to idle its Trollhattan, Sweden, assembly plant since April.

Saab says it disagrees with the court’s interpretation of its voluntary reorganization proposal and expects a decision on its appeal shortly after it is filed.

The auto maker says it expects reorganization would take three months, during which time government wage guarantees will pay its employees’ August salaries.

Saab’s creditors will provide backing to pay supplier debts, the auto maker says. Pending investment totaling some €245 million ($350.6 million) from the Chinese partners, dealership conglomerate Pang da and auto maker ZhejiangYoungman Lotus Automobile, will be used at least partly to exit bankruptcy.

The court says it is unclear when or if funding will materialize, noting even if it is received it may not be sufficient to “structurally solve Saab Automobile’s financial problems.”