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Ailing Swedish carmaker Saab sought breathing space from creditors on Wednesday, filing with a local court for bankruptcy protection through a "voluntary reorganisation" while it continues to wait for promised new investments from two Chinese firms.
"Obviously a restructuring is preferable to bankruptcy. But receivership is still a step closer to bankruptcy. We've always warned investors it was extremely risky," said Jann Maarten Slagter, director of the Dutch shareholders' association, VEB.
Saab, rescued from closure by General Motors Co (GM-N) in early 2010 by Amsterdam-listed Spyker Cars -- later renamed Swedish Automobile (Swan) -- has struggled for several months while it pursues funding from an assortment of Chinese and other investors.
Production at its Swedish plant has been at an almost continuous standstill since April as suppliers refused to provide parts until they received payment. The company also failed to pay salaries in August.
In June, Saab said two Chinese car companies, Pangda Automobile Trade Co Ltd and Zhejiang Youngman Lotus Automobil, had agreed to take a combined majority stake in the firm aimed at rescuing the struggling Swedish carmaker. The deals are still awaiting approval from the Chinese authorities.
"The eventual purpose of the proposed voluntary reorganisation process is to secure short-term stability while sumultaneously attracting additional funding, pending the inflow of the equity contrbutions of Pang Da and Youngman," Swan said in a statement on Wednesday.
But the Chinese authorities have halted planned investments in the past, such as Saab's failed deal with Hawtai Motor Group in May and Sichuan Tengzhong Heavy Industrial machinery's bid for GM's Hummer, which collapsed in 2010.
Swedish newspaper Dagens Industri said late on Tuesday that Youngman would not get the necessary Chinese official approval to take part in the deal, citing several sources.
Instead, state-owned Beijing Automotive Industry Holdings Co (BAIC) or sport utility vehicle maker Great Wall Motor, were seen by Chinese officials as being more suitable partners, the newspaper said.
A source told Reuters in May that Great Wall had been talking with Saab's owner about a possible tie-up.
"At this moment, there is no money and they (Saab) have been waiting for money for more than five months. The problem is still the same -- they need the money," said Theodoor Gilissen analyst Tom Mulleid.
Trade in Swedish Automobile's shares has been suspended and the stock will be put on a watch list if Saab's court request is approved, Dutch market authority AFM said in two separate statements.