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Business

Swedish sports car manufacturer to buy Saab

Text by NEWS WIRES

Latest update : 2009-06-12

Sports car manufacturer Koenigsegg has teamed with Norwegian investors to buy General Motors' Swedish unit Saab, SVT television reports.

AFP - Swedish sports car maker Koenigsegg is to buy Saab Automobile from US giant General Motors with support from Norwegian investors, a broadcaster reported on Thursday.

The buyers have signed a letter of intention to buy Saab, Swedish television station SVT reported on its website, citing anonymous sources and naming Koenigsegg. It said negiotiations to wrap up the deal would last months.

"We are getting close to a deal done, but there are some final steps to be taken," one source close to the matter told AFP, but would not confirm the identity of the leading bidder because of the sensitive nature of the negotiations.

Both Saab and its parent company GM declined to comment on the report.

Saab was put up for sale by General Motors, which filed for bankruptcy after being brought to its knees by falling demand for its cars amid the world economic downturn.

Saab's reorganisation process began separately in Swedish courts in February.

Koenigsegg, set up in 1994, produces just 20 of its deluxe sports cars a year and sells each one for more than a million euros (1.4 million dollars).

The sell-off of Saab Automobile had drawn closer on Thursday when Sweden's government said it had authorised the Swedish Debt Office, which acts as a public bank to the state, to discuss guaranteeing a 500-million-euro loan made to Saab by the European Investment Bank (EIB).

"We have always said that the debt office could start negotiations on guaranteeing the loan when Saab has a new owner," state secretary for business Joran Hagglund said, quoted in a government statement.

"With today's decision we are well prepared for that."

Saab had not named its suitors but British daily The Financial Times had named Koenigsegg plus two other bidders, the US investment firms Renco and Merbanco.

Media reports had also said Italy's Fiat was keen on buying Saab. Fiat on Wednesday sealed a deal to head the relaunch of another fallen US giant, Chrysler.

The Saab auto maker -- not to be confused with a Swedish defence company also called Saab -- sold 93,000 cars worldwide in 2008, according to its website.

It owes 9.7 billion kronor (1.3 billion dollars, 924 million euros) to GM -- its largest individual creditor -- as well as 347 million kronor to the Swedish government. Other creditors are owed 647 million kronor.

The Saab car maker employs about 3,400 people in Sweden. Including suppliers, some 15,000 jobs in the country are believed to be at risk if the company were to disappear.

 

Date created : 2009-06-12

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