Period of creditor protection is extended, as buyers line up for Swedish brand

Saab has been granted an extension of the period it is protected from creditors, giving it more time to restructure.

A Swedish court approved the extension after hearing that no creditors had entered reservations against Saab's proposed reorganization plan. The plan asks creditors to write off 75 per cent of Saab's non-prioritized debts.

"The court has decided that the reconstruction can continue until 20 May at the latest, if no other decision is taken before then," the court said.

A court-appointed administrator, Guy Lofalk, said about 20 "actively interested parties" were eyeing Saab. It's parent company, GM, has said it will cut its ties with Saab by 1 January, 2010.

Saab sought protection from creditors in February in its effort to survive the economic downturn and buy time to find a new owner.

Lofalk said that a sale deal is expected to be completed in June.

Saab is estimated to need $1 billion (£670 million) of financing to help it overhaul production and launch new models.

It aims to raise $600 million (£400 million) of that sum from the European Investment Bank while GM would inject $400 million (£269 million) in the form of debt write-offs and production equipment, the court filing showed.

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