Swedish Automobile shares plunged as Saab doesn’t get protection from creditors

The shares of Swedish Automobile NV dropped as much as 47 percent to 38 cents on the first day of trading since the company sought protection from creditors. As of 11:09 CET in Amsterdam trading, the shares of this company, which is the owner of automaker Saab Automobile, were down 33 percent, valuing Swedish Automobile at $18.3 million or 13.2 million euros. The shares have not traded since September 6, 2011, after they were suspended on the request of Dutch financial-markets regulator AFM.

Yesterday, a court in Sweden ruled against the automaker’s request for protection from creditors, increasing the risk that the vehicle manufacturer is headed for bankruptcy as workers and suppliers seek the money that is due them. The Vaenersborg district court ruled rejected the petition for a voluntary reorganization that the automaker filed on September 7 in a proposal to win time to increase funds to restart operations and to avoid a bankruptcy petition. On Friday, Saab stated that it will be appealing the ruling on Monday.

Saab’s union representatives, who are seeking payment of wages from last month, are watching the situation closely prior to making a decision whether to seek a bankruptcy application aimed at obtaining state funds to pay workers. Per Branneby, who leads Saab's engineering union, mentioned in a phone interview that they are likely to take action only together with other unions. The engineering union at Saab has around 500 members. On the other hand, members of the biggest union of Saab with around 1,500 members -- IF Metall -- are meeting everyday to talk about the situation, spokesman Lars Ankarfjall disclosed. The union intends to "wait a few days" prior to making action, but does not rule out making a decision sooner, he added.[via : 4wheelsnews]