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GM set to pump billions into Saab deal

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17:00 CEST+02:00
General Motors is set to pay out an estimated 10 billion kronor ($1.4 billion) in a bid to ensure it completes the sale of its troubled Swedish subsidiary.

But the American car maker has also indicated it intends to retain ties to Saab Automobile even after the Swedish unit has been sold to the Koenigsegg Group consortium.

"GM is going to have a certain interest in Saab as part of a special financial arrangement that will be revealed in due course," said GM's European manger Carl-Peter Forster, speaking to news agency TT at the Frankfurt Motor Show on Tuesday.

Koenigsegg Group representatives have previously stated that GM is prepared to shell out 2.8 billion kronor for preferential shares in Saab Automobile, a move that would enable the ailing US giant to benefit from any future Saab profits.

GM's decision to sell Saab has already proved costly, with 7 billion kronor disappearing when the parent company took over a number of Saab's debts to its subcontractors.

GM has also agreed to pay for the production tools for the new Saab 9-5 and to release the Swedish firm from commitments to repay a restructuring loan, undertakings that amount to a combined total of around 3 billion kronor.

GM has also said it will contribute to further alleviating Saab's general cost burden to help ensure the successful implementation of Saab's new business plan.

Saab chief Jan Åke Jonsson confirmed that GM's contribution to Saab would land in the region of 10 billion kronor.

Jonsson added however that GM was hoping its goodwill would eventually lead to a return on its investment.

"We are going to retain our cooperation with GM through a number of agreements, and GM will deliver quite a few products to us that they make money from, such as engines and gearboxes," he said.

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