Saab future in doubt

The board of the Swedish carmaker Saab, which is owned by General Motors, has held an extraordinary board meeting to consider its future.

Local media reports have suggested Saab was considering taking measures to seek protection from creditors.

There have been doubts about the future of Saab since the Swedish government rebuffed GM's call for financial aid for the car maker.

It was later reported that the meeting had been adjourned.

Micael Lindell, a union representative at Saab, said the board meeting had broken up and would reconvene at some point, but could not say when this would happen.

Saab itself has refused to confirm that the meeting took place.

'Cash demands'

GM plans to make Saab an independent business by the start of 2010.

The reorganisation process is the Swedish equivalent of going into Chapter 11 bankruptcy in the US.

The company applies to the district court for a reorganisation ruling.

If it is granted, an administrator is appointed, but the current management continues to run the company.

The administrator helps negotiations with the company's creditors to decide how much of their money they will receive.

The reorganisation lasts three months and may be renewed by the court, up to a maximum of one year.

During that period, the company is not allowed to pay off any debts that were accumulated before the reorganisation was declared.

GM has been looking for a buyer for Saab, and said on Wednesday "given the urgency of stemming sizeable cash demands associated with Saab operations" it would need support from the Swedish government prior to any sale.

But the country's Enterprise and Energy Minister Maud Olofsson told Swedish public radio that "voters picked me because they wanted nursery schools, police and nurses, and not to buy loss-making car factories".

Source: BBC News