Sweden approves new Saab financing plans
TT/The Local/dl · 15 Apr 2011, 17:45
Published: 15 Apr 2011 17:45 GMT+02:00
- National Debt Office opens up for Saab loans (15 Apr 11)
- 'Saab is a brilliant deal': Antonov (14 Apr 11)
- Saab debts top 'several hundred million' (13 Apr 11)
"The government has given Saab the green light to borrow money for its daily operations," Olofsson told reporters.
Sweden has a final say in Saab's business because it last year guaranteed a €400 million ($580 million) European Investment Bank (EIB) loan for the company through its National Debt Office (NDO).
The NDO sent Saab's refinancing proposal to the government late Thursday with a recommendation that it be approved.
The solution means that Saab has permission to sell its real estate to Russian financier Vladimir Antonov. In exchange, Saab will be able to use the entire loan from the EIB.
"In practice, this means a reduction in tax payers' exposure because the amount of the loan will be reduced," Olofsson said.
Under the agreement, the NDO released its security covering Saab's property holdings, meaning Spyker can now use these assets to raise fresh cash.
She explained that the debt office is in the middle of carrying out an investigation of the new owner and that Friday's decision doesn't mean it has completed its assessment.
The probe is being conducted at the request of Saab, but is not yet finished.
The Debt Office must first eliminate a number of questions surrounding the new owner, said Olofsson.
But the government has placed three tough conditions in order for the deal to be approved.
The agreement must be signed between Saab and the buyer of its associated property company, Saab Automobile Properties AB, guaranteeing Saab a reasonable payment for company.
Saab must also retain access to the facilities to carry out its production. Finally, payment for the real estate must be carried out through a bank that isn't controlled by the buyer.
Olofsson explained that the condition that the transaction be carried out through a European bank was meant to ensure the government that the deal involved a "serious buyer".
She added that the requirement would also minimize the risk of money laundering.
Spyker rescued iconic Swedish brand Saab at the last minute in January 2010 by buying it from US auto giant General Motors.
But it did not meet its sale objectives for the year and last month Saab started halting production amid conflicts with suppliers over unpaid bills.
Saab said last week production was stopped "until further notice".