GM UNIT SAAB BANKRUPT

February 20th, 2009

HA! Socialist Sweden isn’t as socialist as the U.S. when it comes to corporate bailouts.

Via: AP:

General Motors Corp.’s Swedish-based subsidiary Saab went into bankruptcy protection Friday so the unit can be spun off or sold by its struggling U.S. parent, officials said.

The move comes after Sweden turned down GM’s request for government help for Saab.

An application to reorganize the brand was filed at a district court in Vanersborg, in southwestern Sweden, Saab spokeswoman Margareta Hogstrom said. It was approved later Friday.

The Swedish government on Wednesday rejected a request from loss-making GM to inject money into the carmaker. GM, which is seeking help from the U.S. government to avoid bankruptcy at home, has been looking for buyers for Saab but said it needs more funding to spin off or sell the division.

“We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment,” Saab’s managing director, Jan Ake Jonsson, said in a statement.

The move would give Saab protection from creditors while it restructures in a process similar to a Chapter 11 bankruptcy in the U.S.

“Pending court approval, the reorganization will be executed over a three-month period and will require independent funding to succeed,” Saab said, adding it would seek funding “from both public and private sources.”

However, government officials seemed to rule out financial assistance. “I’m not sure what they’re referring to, because support in the form of money is not on the agenda,” Industry Ministry spokesman Hakan Lind said.

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