Shanghai car maker to join Saab deal: report

Koenigsegg Group has informed the Swedish government that it has finally put together the financial package necessary to purchase Saab Automobile from General Motors.

• GM to fill Saab funding hole: report (2 Sep 09)
• Reinfeldt fobs off Koenigsegg Saab plea (20 Aug 09)
• Sweden refuses to fill capital hole in Saab deal (19 Aug 09)

“We are working on it and going through the details, but in general it looks promising,” Jöran Hägglund, State Secretary at the Swedish Ministry of Enterprise, Energy and Communications, told TT news agency.

Halldora von Koenigsegg of Koenigsegg Automotive said the company will make a public announcement as soon as possible, but does not want to make a statement at this time.

According to business daily Dagens Industri, Chinese car manufacturer SAIC, Shanghai Automotive Industry Corporation, may also become an investor, in addition to GM, which has already pledged a contribution of almost 3 billion kronor ($423 million) in loans and production equipment.

The financial package increases Saab's chances of securing a loan from the European Investment Bank (EIB), according to Hägglund.

“The addition of private capital was necessary to move forward,” he said.

Hägglund believes that the EIB's board is likely to evaluate Saab's loan application at its next meeting on October 21st. Saab wants to borrow the equivalent of almost 4 billion kronor ($564 million) to develop new technology in the areas of environment and security.

Discussions are ongoing about whether or not Saab's loans would be guaranteed by the Swedish government, according to Hägglund.

Koenigsegg Group has previously said that 11 billion Swedish kronor ($1.5 billion) are needed to close the Saab deal.

Three weeks ago, Koenigsegg announced that they were short 3 billion kronor and they wanted to obtain an additional government loan, something which has now been completely ruled out.

“It has been understood that there is no such possibility and that it should be handled in another manner,” Hägglund said.