Updated from 5:41 a.m. EST
, the Swedish-based unit of
filed for protection from its creditors Friday so it can be spun off or sold by its struggling U.S. parent, officials said.
An application to reorganize Saab was filed at a district court in Vanersborg, in southwestern Sweden, a Saab spokeswoman said. The plan was approved later Friday, the
The move comes after the Swedish government rejected a request from GM to inject money into the carmaker. GM has been looking for buyers for Saab but said it needs more funding to put the brand up for sale.
"We explored and will continue to explore all available options for funding and/or selling Saab and it was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment," Saab's managing director, Jan Ake Jonsson, said in a statement.
The move would give Saab protection from creditors while it restructures in a process similar to a Chapter 11 bankruptcy in the U.S.
"The reorganization will be executed over a three-month period and will require independent funding to succeed," Saab said.
It was reported Thursday by
that General Motors was moving ahead with plans to sell the Saab operating unit.
The European auto sales environment "is every bit as severe as the U.S. environment in terms of primary demand and the challenges we face," president Fritz Henderson told analysts on a conference call earlier this week. In the viability plan it submitted to the Treasury on Tuesday, GM said it will cut 47,000 jobs, including 26,000 jobs outside the U.S., this year.
Regarding Saab, the company's objective "is to create an entity that is stand-alone and self-financing," Henderson said. "If we cannot find common ground, we could find our Swedish business may need to file for reorganization, perhaps this month."
GM said it wants to sell Saab and "given the urgency of stemming sizeable outflows associated with Saab operations," it is seeking Swedish government support, according to the automaker's viability plan. GM has proposed capping its own financial support, "with Saab's operations effectively becoming an independent business entity effective January 1, 2010."
This article was written by a staff member of TheStreet.com. AP contributed to this report.