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Old 06-16-2009, 11:28 AM   #1
MagicRat
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SAAB has been sold!

GM sells Saab to sports-car maker Koenigsegg

STOCKHOLM (AFP) - Fallen US auto giant GM said on Tuesday it is selling its beleaguered Saab unit to Swedish luxury sports car firm Koenigsegg, ending a 20-year tie-up which brought only a single annual profit.
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"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.

GM, now in bankruptcy protection in the United States, put Saab up for sale in February as it tried to cut loose a series of underperforming assets in a major restructuring programme but failed to find a buyer.

Saab has been under reorganisation process since February 20.

Koenigsegg, founded in 1994 by Swedish businessman Christian von Koenigsegg, has just 45 employees and produces 18 high-end sports cars a year at more than a million euros (1.4 million dollars) each.

GM Europe President Carl-Peter Forster said in a statement that the deal "represents the best chance for Saab to emerge a stronger company."

The sale is expected to be completed by the end of the third quarter.

Financial details were not disclosed but GM said it included 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.

Saab sold 93,000 cars worldwide in 2008 but is saddled with massive debt.

It owes 9.7 billion kronor (1.3 billion dollars, 924 million euros) 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, with another 12,000 jobs dependent on it through suppliers.

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.

While some commentators questioned whether Koenigsegg has the financial muscle or industrial know-how to run Saab, Evli Bank auto analyst Michael Andersson told AFP he was cautiously optimistic about its future under its new owners.

"Saab hasn't worked for 20 years," Andersson said. "Its still going to be a very tough nut to crack but ... I don't think that these guys (Koenigsegg) will be any worse than an uninterested management board in Detroit."

Koenigsegg is backed by a Norwegian financial tycoon, Baard Eker, whose holding company Eker Group holds a 49 percent 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.

Sweden's government had in recent months refused to follow Washington's lead in bailing out 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, Trollhaettan, the Vaestra Goetaland region and the government have all been waiting for," she said in a statement.

Paul Aakerlund, union respresentative for IF Metall at Saab, told AFP the announcement was "positive for Trollhaettan and for Sweden," hitting out at the negative coverage the deal had received in the Swedish press.

"Koenigsegg Group is a company which has a lot of strong investors. We have a lot of money and muscle," said Aakerlund, who also sits on Saab's supervisory board.

"For us, it's more important that Koenigsegg have said they will follow their business plan and bring production back to Trollhaettan. Hopefully in a year or so, we will have more people working at Saab than we do today," he added.

GM bought 50 percent of Saab Automobile from Saab-Scania in 1990, snapping up the rest of the company a decade later.

It posted a 2008 net loss of 3.0 billion kronor as sales plunged 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.
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