GM said on June 16 it is selling its beleaguered Saab Automobile to Swedish luxury sports car firm Koenigsegg. GM said the deal would "secure Saab's future."
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 $1.4 million.
"Koenigsegg 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.
The sale is expected to be completed by the end of the third quarter. The financial details of the deal were not disclosed, but GM said it included an expected $600 million 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.
Saab sold 93,000 cars worldwide in 2008. It owes 9.7 billion kronor (US$1.3 billion) to GM -- its largest individual creditor -- as well as 347 million kronor to the Swedish government. Other creditors are owed 647 million kronor.
Saab employs about 3,400 people in Sweden, and about 12,000 other jobs in the country are dependent on it through suppliers.
GM bought 50% of Saab Automobile from Saab-Scania in 1990, snapping up the rest of the company a decade later. The car unit posted a 2008 net loss of 3.0 billion kronor (US$ 341 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.
GM said it would continue to provide technology to Saab during a "defined time period," and added that Saab would produce the next generation of 9-5 models in Trollhaettan in southwestern Sweden where the company is based.
Commentators in Sweden have questioned whether Koenigsegg has the financial muscle or industrial know-how to run Saab. Koenigsegg is backed by a Norwegian financial tycoon, Baard Eker, whose holding company Eker Group holds a 49% stake in the sports car 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 head of the IF Metall metal workers' union, Stefan Loefven, 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.
Copyright Agence France-Presse, 2009