US automaker General Motors has signed a tentative agreement with Koenigsegg to sell its beleaguered unit, GM said in a statement on Tuesday.
“General Motors Corp. and Koenigsegg Group AB, a consortium led by Koenigsegg Automotive AB, today confirmed the details of a memorandum of understanding for the purchase of Saab Automobile AB that secures Saab’s future,” GM said.
The Swedish company has been undergoing a legal reorganisation process since February 20th.
Koenigsegg, founded in 1994 by Swedish businessman Christian von Koenigsegg, has just 45 employees and produces 18 high-end sports cars a year for more than a €1 million ($1.4 million) each.
“Koenigseggs Group’s unique combination of innovation, entrepreneurial spirit and financial strength, combined with Koenigsegg’s proven ability to create world-class Swedish performance cars in a highly efficient manner, made it the right choice for Saab as well as General Motors,” GM Europe President Carl-Peter Forster said in a statement.
“Closing this deal represents the best chance for Saab to emerge a stronger company,” he said.
The sale, which is expected to close by the end of the third quarter, includes an expected 600 million dollar funding commitment from the European Investment Bank, guaranteed by the Swedish government.
“Additional support is to be provided by GM and Koenigsegg Group to fund Saab’s operations and product programme investments,” GM said.
The Saab automaker — 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) to GM — its largest individual creditor — as well as 347 million kronor to the Swedish government. Other creditors are owed 647 million kronor.
Saab Automobile employs about 3,400 people in Sweden, and some 12,000 other jobs in the country are dependent on Saab through suppliers.
Commentators in Sweden have questioned whether Koenigsegg would have the financial muscle or industrial know-how to run Saab.
The company is backed by a Norwegian financial tycoon, Bård Eker, whose holding company Eker Group holds a 49 percent stake in the niche sportscar maker.
Eker told Norwegian media at the weekend that “several investors” were backing his bid to buy Saab, but would not disclose their names.
The Swedish government had in recent months refused to follow Washington’s lead in bailing out its automakers Saab and Ford-owned Volvo Cars over fears the money would end up in the pockets of the US parent companies.
In a sign that a sale was imminent, Stockholm announced last week that it had authorised the Swedish Debt Office, which acts as the state’s bank, to discuss guaranteeing a loan made to Saab by the European Investment Bank.
Sweden’s government had in recent months refused to follow Washington’s lead in bailing out its automakers Saab and Ford-owned Volvo Cars over fears the money would end up in the pockets of the US parent companies.
Swedish Enterprise Minister Maud Olofsson welcomed Tuesday’s news, saying it put an end to months of uncertainty about Saab’s future.
“It is good that Saab’s ownership issue is now settled. This is an announcement that the company’s employees, Trollhättan, the Västra Götaland region and the government have all been waiting for,” she said in a statement.
The head of the IF Metall metal workers’ union, Stefan Löfvén, said meanwhile the deal was “clearly a different ownership solution.”
“But perhaps that is just what is needed to exploit the hidden values within Saab. We have all along said that we want to see an owner who wants to and who can develop Saab and its operations in Sweden with research and development as well as production,” he added.
GM bought 50 percent of Saab Automobile from Saab-Scania in 1990, snapping up the rest of the company a decade later.
The car unit posted a 2008 net loss of 3 billion kronor ($241 million), as sales dwindled due to an ageing product line and a collapse in demand as credit lines tightened.
It last made a profit in 2001, the only year it was in the black in almost two decades of GM ownership.