Swedish carmaker Saab admits it can’t pay staff

Sweden-based car manufacturing company Saab said on Thursday that it cannot afford to pay wages to its employees.

The company said it will be unable to pay its staff as it has not yet obtained the necessary short-term funding. “Swedish Automobile and Saab Automobile are in discussions with various parties to obtain short-term funding, including via the sale and lease-back of the real estate of Saab that was announced previously, and with their financiers in connection with current financing arrangements,” the company said in a statement.

There can however be no assurance that these discussions will be successful or that the necessary funding will be obtained, it said.

The company also has ongoing negotiations with suppliers in reaching agreement on the terms of payments in order to resume an orderly inflow of parts and components.

The company was even not able to pay suppliers, a development that snarled production at its Sweden plant in April. The work has not resumed yet.

Last month, a rescue deal for Saab involving China's Hawtai Motor Group collapsed, leaving owner Spyker chasing new funding alternatives as it attempts to restart production at the Swedish carmaker.