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GM unit Saab files for bankruptcy protection

Automaker Saab filed for bankruptcy protection Friday and has applied to be spun off from its parent company General Motors, officials said.

An application to reorganize the Swedish-based unit was filed at a district court in Vanersborg, in southwestern Sweden, Saab spokeswoman Margareta Hogstrom said.

The move comes after the Swedish government rejected a request from loss-making 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 process is similar to a Chapter 11 bankruptcy in the U.S.

"Pending court approval, the reorganization will be executed over a three-month period and will require independent funding to succeed," Saab said.

On Wednesday the Swedish government rejected GM's plea for state funding for Saab, saying it was up to the U.S. automaker to save the brand.

GM said it needed about $6 billion in support from the governments of Canada, Germany, Britain, Sweden and Thailand to provide liquidity for its operations in those countries.