Sweden agrees to guarantee Saab loan
The Swedish government notified the European Commission on Monday that it was prepared to guarantee the 4 billion kronor ($570 million) loan that troubled automaker Saab is seeking from the European Investment Bank (EIB).
The move helps keep the planned sale of the General Motors (GM) unit on track, although a government official cautioned Sweden’s readiness to provide state guarantees doesn’t mean the EIB loan is assured.
“It’s now up to the Commission to assess Saab’s prospects for borrowing money. Just because we notified them doesn’t mean the deal is done,” said Jöran Hägglund, state secretary with the Ministry of Enterprise, Energy and Communications (Näringsdepartementet), to the TT news agency.
But Hägglund added that the notification means that the government hopes the deal will go through.
“The deal is still alive for us. If we hadn’t believed in it, we wouldn’t have chosen to notify the Commission,” he said.
Saab wants to borrow 4 billion kronor from the EIB, but before it can, the European Commission must make sure the government’s guarantees don’t run afoul of EU rules on state supports for industry, and that the carmaker’s business isn’t at risk for insolvency, the Göteborgs-Posten (GP) newspaper reports.
If all is in order, the Commission will then signal its approval for the loan through a statement of “no objection”.
Saab is now awaiting the Commission’s decision.
“This is an important step along the way,” Saab’s state agency liaison Anne Petre told the newspaper.
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The move helps keep the planned sale of the General Motors (GM) unit on track, although a government official cautioned Sweden’s readiness to provide state guarantees doesn’t mean the EIB loan is assured.
“It’s now up to the Commission to assess Saab’s prospects for borrowing money. Just because we notified them doesn’t mean the deal is done,” said Jöran Hägglund, state secretary with the Ministry of Enterprise, Energy and Communications (Näringsdepartementet), to the TT news agency.
But Hägglund added that the notification means that the government hopes the deal will go through.
“The deal is still alive for us. If we hadn’t believed in it, we wouldn’t have chosen to notify the Commission,” he said.
Saab wants to borrow 4 billion kronor from the EIB, but before it can, the European Commission must make sure the government’s guarantees don’t run afoul of EU rules on state supports for industry, and that the carmaker’s business isn’t at risk for insolvency, the Göteborgs-Posten (GP) newspaper reports.
If all is in order, the Commission will then signal its approval for the loan through a statement of “no objection”.
Saab is now awaiting the Commission’s decision.
“This is an important step along the way,” Saab’s state agency liaison Anne Petre told the newspaper.
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