* Says not enough money to continue reorganisation
* Says one viable option would be sale to Chinese co's
* North Street Capital to invest $10 mln in equity
* Also, the US hedge fund manager to provide $60 mln loan
(Updates with administrator asking to pull plug, adds
By Johan Sennero and Greg Roumeliotis
STOCKHOLM/AMSTERDAM, Oct 20 The administrator
in charge of Saab's SWAN.AS reorganisation asked on Thursday
that a Swedish court pull the plug on bankruptcy protection,
just hours after an investment firm promised new cash to help
keep the struggling carmaker alive.
Saab has struggled for months to fight off bankruptcy and
hoped creditor protection would give it time to restructure as
it awaits investment from China.
But the iconic, 60-year-old brand will have little chance
of survival if the court accepts reconstruction has failed.
Saab administrator Guy Lofalk told Reuters in an interview
there was far from enough money to keep the reorganisation
running. He sent a Swedish court an application asking that it
terminate the entire process.
"The money is not enough to continue the reorganisation,"
he said. "The original reorganisation plan included financing
which has not materialised."
The court could end the reorganisation and creditor
protection process as early as Friday, leaving the field open
for creditors -- or Saab itself -- to demand that the company
be declared bankrupt.
Swedish Enforcement Authority official Hans Ryberg said
that if the reorganisation is ended, the agency will resume its
process to seize any remaining Saab assets, to recover debts
owed to suppliers.
Saab, which was not available for comment, said in a
statement that it would contest Lofalk's application and ask
the court to replace him.
The turn of fortune for the Dutch-owned carmaker came even
as an investment firm of racing car enthusiast Alex Mascioli
said it would invest $70 million in the carmaker as Chinese
bridge financing looked uncertain.
Saab owner Swedish Automobile SWAN.AS said Thursday it
would accept a $10 million equity investment and a $60 million
loan from North Street Capital LP, a U.S. hedge fund manager,
to fund its ongoing reorganisation. North Street bought the
luxury sports car business of the Dutch owner of Saab in
But Lofalk said even that cash was far from enough to keep
the reorganisation process alive. He said one viable solution
was to let Chinese investors buy the whole company.
Chinese auto firms Zhejiang Youngman Lotus Automobile Co
and Pangda Automobile Trade Co (601258.SS) have agreed to
invest 245 million euros in Saab. Youngman is also behind a
bridge loan to Saab that has been partly paid out.
But question marks have dogged the Chinese investments from
the start, not least whether authorities in that country would
give the go-ahead.
Lofalk said the two firms are keen to buy Saab, but they
have failed to reach an agreement with Saab's current owners.
"I can just say that the parties didn't manage to reach an
agreement on a sale," he said.
In June, Swedish Automobile signed a non-binding memorandum
of understanding for Youngman to take a 29.9 percent stake in
Saab and for Pangda (601258.SS) to take 24 percent.
Lofalk said he was told by authorities in China that the
companies had the financial muscle to save the carmaker.
Chinese authorities, however, have yet to give a green light on
the two companies taking ownership in Saab.
The new cash offer comes a day before a state guarantee on
wages that kicked in during the company's reorganisation was
due to expire, and just before October wages were due to be
Swedish Automobile had hoped Chinese money would keep the
lights on, but it expressed doubts on Thursday about whether
the bridge funding will be paid in full on Oct. 22, Swedish
Automobile said on Thursday. [ID:nL3E7LD133]
SHARES AND LOAN
Swedish Automobile has struggled for months, seeking new
investors and selling off various assets in a bid to pay
suppliers and employees and resume production at its Saab plant
in Sweden. It exited another reconstruction process less than
two years ago.
North Street plans to buy 2.38 million Swedish Automobile
newly issued shares, representing 10 percent of the
Dutch-listed firm's outstanding shares, at $4.19 each by Oct.
21 to fund Saab's working capital, Swedish Automobile said.
The shares traded up as much as 17 percent but gave up
gains on news of Lofalk's intentions and ended the day down 10
percent at 0.85 euros, giving it a post-dilution market
capitalisation of about 23 million euros.
The hedge fund manager will also give a $60 million loan
collateralised on certain Saab assets. Documentation is to be
finalised by Oct. 24 so that funding is available two days
later, it added.
Employees currently have no claims on Saab after the state
paid wages as part of the reorganisation process. But that
wage-insurance guarantee expires this week, so if the
reorganisation is ended, Saab must come up with wages for the
last week of the month on paydays Oct. 25 and 27.
"We'll have to await the day of payment (of wages) and see
what happens," said Martin Wastfelt, lawyer at blue-collar
union Unionen with around 500 members at Saab.
Also, more than 150 suppliers have about 250 million crowns
in claims on Saab pending at the debt enforcement authority.
($1 = 0.725 Euros)
(Additional reporting by Mia Shanley and Anna Ringstrom in
Stockholm and Aaron Gray-Block in Amsterdam; Editing by Helen
Massy-Beresford, Gary Hill)