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SAAB : BRIDGING THE FINANCIAL GAP…

BECAUSE OF THE DYNAMICS INDUCED BY THE EVOLUTION OF GLOBAL CAR MARKETS, THE CAR MAKERS MUST INCREASINGLY GRAPPLE WITH THE CHALLENGES OF RESTRUCTURING.

IN ADVANCED INDUSTRIAL ECONOMIES, VOLUNTARY RESTRUCTURING IS TAKEN AS SYNONYMOUS WITH MERGERS AND ACQUISITIONS. HOWEVER, VOLUNTARY RESTRUCTURING CAN TAKE OTHER DIVERSE FORMS, SUCH AS REFINANCING, MANAGEMENT REALIGNMENT, LEVERAGED BUY OUTS (LBOs), AND EMPLOYEE STOCK OWNERSHIP PLANS ( ESOPS).

SOMETIMES, SOME RESTRUCTURES ARE INVOLUNTARY AND CAN ACTUALLY BE INDUCED BY THE PRESCRIPTIONS OF THE BANKRUPTCY CODE.

THIS IS THE CASE WHEN IT COMES TO SAAB.

SWEEDEN’S SAAB SOUGHT COURT PROTECTION FROM CREDITORS ON SEPTEMBER 7TH, 2011 TO AVOID BEING PUSHED INTO BANKRUPTCY IN A WORSENING OF A CRISIS WHICH IT HOPES WILL BE SOLVED BY CHINESE INVESTMENT.

INCIDENTLY, COURT PROTECTION WOULD GIVE THE 60-YEAR OLD COMPANY BREATHING SPACE TO COME TO TERMS WITH CREDITORS, GET OFFICIAL APPROVALS FOR THE CHINESE INVESTMENTS AND SECURE OTHER SHORT-TERM FINANCING.

IT IS OUR UNDERSTANDING THAT THE CAR MAKER SAAB’S APPLICATION FOR PROTECTION FROM ITS CREDITORS HAS BEEN REJECTED BY A SWEEDISH COURT ON SEPTEMBER 8.

SAAB SAID IT WOULD APPEAL THE DECISION.

 

 

 

OUR COMMENTS :

  • OVER THE COURSE OF ITS LIFE, A FIRM WILL EITHER PERIODICALLY RESTRUCTURE OR FAIL TO SURVIVE.
  • THE BURDEN ENTAIL SPECIFIC DECISIONS ON THE SHORT AND LONG-TERM EFFECTS OF THE PROPOSED RESTRUCTURE TO THE SHAREHOLDERS.
  • WHATEVER IS DECIDED WHEN IT COMES TO SAAB, THE SENIOR MANAGEMENT SHOULD NEVER COMPROMISE ON SHAREHOLDER VALUE !…

PHLDUCX