GM will be spinning off Saab as an independent business as of January 1st 2010. Reorganization will provide the automaker with legal protection from creditors as it attempts a restructuring. Saab is still seeking investors or a new owner.

On Friday, Saab announced it is filing for a 'reorganization' under Swedish law which will provide the troubled automaker with legal protection from creditors as it attempts a restructuring.

That means GM will be spinning off Saab, leaving the loss-making Swedish car maker to fend for itself. According to a restructuring plan GM submitted to the US Treasury this week as a condition of the government loans it has received, Saab will become an independent business on January 1st, 2010.

"We explored and will continue to explore all available options for funding and/or selling Saab, and it was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment," said Jan-Ake Jonsson, Saab's Managing Director, in a statement quoted by Reuters.

Filing for reorganization is different from an outright bankruptcy under Swedish law and Saab is still looking for investors or new ownership in order to keep the brand in business.

GM began buying into Saab in 1989 and later became its full owner. The Swedish brand has never made a profit and analysts believe Saab will need several billion dollars in order to turn its fortunes around.